Today, companies can accomplish more with ten employees than they would have been able to with a thousand workers fifty year¬s ago. Underpinning this shift is the increasing focus on strategic sourcing of essential IT services.
Automation and computerisation are¬ key elements in this change, as is the move to third-party service providers, as-a-service software and infrastructure, and reliance on remote IT job shops. Each of these factors enable organisations to consolidate and take a more tactical approach towards their IT services.
Companies are looking for agile, cost-saving solutions and service providers are responding well to their demands. However, many enterprises are undertaking sourcing without a centralised strategy, working on the assumption that efficiency and cost savings will naturally follow. Steadily decreasing contract durations, from between an average of five to seven years to three, is resulting in frequent contract renewals, and also requires far more rigorous management of contracts and greater due diligence around sourcing and renewals. However, without the requisite monitoring or evidence, there is no guarantee that the benefits of a strategic IT set-up will come to fruition.
Technology Business Management (TBM) demystifies the sourcing processes, helping enterprises determine whether sourcing ¬arrangements will benefit them, both now and i¬n the future.
The effects of shadow IT
Sourcing ecosystems, even in small and midsize organisations, are often sprawling operations comprised of multiple (often dozens) of service providers reporting into multiple managers. This can result in ‘shadow’ or ‘stealth’ IT, whereby IT solutions are deployed and used within organisations without the knowledge or approval of the IT department. While not always negative, when allowed to run unchecked, these structures can seriously undermine the would-be benefits of sourcing. By its nature, shadow IT negates efforts to have full oversight and unified management, which can lead to subpar or duplicated services.
Enabling transparency
TBM provides enterprises with a transparent, consistent and ongoing ‘system of record’, which not only tracks IT spend but monitors and benchmarks on a continuous basis so that buyers and IT service providers alike can track the value being delivered throughout the duration of a contract. Additionally, the TBM Unified Model standardises operational and financial information, creating a taxonomy which facilitates ongoing comparisons of infrastructure IT costs against industry peers and gives enterprises a baseline for internal and external costing discussions. All stakeholders within a business can benefit from this dynamic, real-time tracking environment. While the IT department serves as a broker to guard against redundancies, ensure the best deal and track return on investment, individual line managers retain their authority to source services.
When properly managed, sourcing ecosystems allow enterprises to obtain the best possible services, software, talent and infrastructure that may not otherwise be available to them. But to get the most out of sourcing arrangements, companies must truly understand their IT environments and investments. TBM safeguards qualify and cost-effectiveness. The outputs of TBM – visibility into the total cost of ownership and the productivity and quality indicators from individual applications or services – will help enterprises make the best choices when restructuring their sourcing agreements.