Why smart sourcing enables IT and business convergence

by Damian Skendrovic

05 May 2020

Two women running on a road

NTT Ltd.’s 2020 Global Managed Services Report, conducted by IDG Research, covers the challenges and opportunities felt by business and IT leaders. Covering three core themes including security, end-user transformation, as well as expertise and service provision, of which this blog focuses on.

Deep technical expertise and strong service provision are an important part of a smart sourcing approach. It’s about working with service providers who have the ability to compliment your inhouse teams with the right skills, as well as providing you with a wide portfolio of services; it’s not only about running your daily business, but taking you forward on your IT transformation journey.

The rise of smart sourcing

Smart sourcing is an approach to the selection and prioritization of those service providers that go above and beyond the delivery of tactical IT solutions. It’s about nurturing long-lasting relationships with providers who can deliver business outcomes aligned to the goals of the entire organization. 

 
 Smart sourcing

But what does it take to develop a smart sourcing approach?

The external relationship

IT environments are complex. When coupled with a lack of skilled IT professionals, it’s no surprise ‘technical expertise’ ranks as the number one factor for service provider selection according to our research. Specifically, expertise in ‘cloud infrastructure’ and ‘security’ leads the way as the most desired skills; which makes sense given the increased usage of networks and systems due to remote working in the current climate.

We know client / service provider relationships are complex. Our research shows nearly half of organizations globally manage between 6 and 10 big vendor relationships. And that complexity has an impact. Not just in terms of performance issues, but challenges around the SLAs and contracts. Indeed, in this COVID-19 world, nearly half of service providers are considering renegotiating SLAs based on their actual ability to respond.

As such, the ability to flex, scale and turn data into knowledge is one of the major benefits of a platform-based approach to delivering services, which in turn ensure a business outcome focus.

This is important. More and more, organizations want their service providers to deliver business outcomes, rather than typical IT related measures as part of a traditional outsourcing relationship.

The internal relationship

For as long as IT has been in the enterprise, it sits as a separate entity to the rest of the organization. In the perfect world, IT strategy is, just simply business strategy.

As if to prove this point, our Digital Means Business Report found just 29% of IT and business teams collaborate consistently on transformation. There needs to be much greater convergence between IT and business leaders.

It takes major events or introductions of new technology to force convergence. In recent times, that event was likely the consumerization of IT. It meant business leaders didn’t require technical knowledge to technology to deliver the outcomes they needed. Funded through CAPEX, services are considerably easier to manage and scale up and down as they needed.

A person walking over a bridge

Smart sourcing and strong service providers help IT leaders build relationships and deliver strategic outcomes

Smart sourcing boosts internal relationships due to the skills and expertise service providers bring. They help form an open dialogue between the business and IT, ensuring both strategic requirements are met, and that projects are judged on business performance metrics.

Convergence for relevance

IT had to converge with business in order to remain relevant. This is why a smart sourcing approach with strong service providers greatly assists IT leaders in getting closer to the business. To build relationships and deliver strategic outcomes. 

To understand more about how smart sourcing can help you, take our managed services landscape self-assessment and see if you’re ready to build smart sourcing into your organization.

Be sure to register for our webinar as we discuss further insights from our 2020 Global Managed Services research.

Damian Skendrovic

Damian Skendrovic

Executive Vice President, Managed Services Go-to-market, NTT Ltd.