Market & Sourcing
IT sourcing - faster and more efficient
by Dr. Thomas Barnekow
Automation is a major driver of IT. In IT sourcing advisory, by contrast, things are still mostly done manually. Yet all stages in the sourcing lifecycle offer potential for useful automation solutions.
Automation has a high priority in many IT organisations. In our 2023 IT Agenda survey, the topic landed in fifth place, between recruitment of skilled workers and cloud migration. After all, IT managers are expecting a lot from having manual processes done by machines. The hope is not unfounded: according to our Data Lake, for example, automation can reduce costs in the application environment by 23.1 per cent in four years.
In IT sourcing advisory, companies are also demanding faster analyses, shorter decision-making processes, less effort and lower external costs - an easy opportunity for automation. The goal is to form partnerships between companies and the right, qualified IT providers in less time and with less effort. Consultants need good market knowledge and data to involve an adequate number of qualified providers in the most efficient and constructive sourcing process possible, in which providers are given the opportunity to contribute their skills and innovations. And the consultants need to stay on the ball with the ever faster change at the precise technological and operational level in order to be able to support companies in selecting the best solutions and providers for them.
Little automation in sourcing advisory
Nevertheless, many IT organisations and their consultants still proceed quite traditionally - although there has been a great technical progress in IT, digitalisation in sourcing advisory, as in other consulting fields, has only been successful in places. Especially in the processes on the client and provider side of the consulting firms, there are still many individual and manual workflows. This is an unsatisfactory situation for all parties involved, because it results in high costs and, above all, time delays. Today, IT buyers and sourcing managers must be able to react quickly to changes in the business and the IT strategy.
Automation of sourcing documents
For example, different parties are involved in tendering, contracting or transactions, such as the consultants, the client team, lawyers and also service providers. They all work on documents for service description, service levels, pricing or governance. The contract alone can quickly contain 30 or even 70 or more individual documents, plus operational documents on processes, organisation, technology and procedures. If these documents are essentially handled manually, this creates an immense amount of work. If, for example, even a small detail such as the date on the title page has to be changed in all documents, consultant hours are accrued and experience shows that the error rate increases.
Adapt sourcing documents at the push of a button
For example, we use the tool DokuMate, which I have developed over the past few years. It is a tool for managing document sets, such as tenders and response or contract documents. With it, you can automatically implement changes in files at the push of a button. The effort required drops from days to hours or from hours to seconds. Thus, timelines requested by the customer become possible and milestones are reached on time. If everything has already been digitised and automated, it can be built upon later in the management phase. In addition, media discontinuities and tool changes are avoided through defined standards in the project, which reduces frictional losses.
One platform for sourcing advisory
The entire system for sourcing automation is based on a central sourcing platform to which three areas of Sourcing Advisory are attached: Process Automation, Data and Analytics as well as Document Automation. Process automation is not about mapping rigid processes, but about activities that occur in every project. These include project management and a Q&A process for customers and providers, for example in tenders. This can be solved much more elegantly and efficiently with suitable tools than with Excel files via email. Project managers on the consultant side benefit from a comprehensive solution for project planning and tracking if they have to manage and control many internal resources and their workstreams.
Data and analytics are digital solutions for pricing and performance benchmarking or partner selection: Which service provider offers field support taking into account industry-specific regulations in which regions? Instead of spreading the RFP widely, you can identify potential service providers by quickly querying the database. Even today, Excel workbooks are used for this, but it can be done more cleverly. And in contract analysis, it is possible to directly display the optimal clause for a specific requirement.
If Sourcing Advisory is implemented sensibly, everyone involved will benefit: clients, consultants and service providers.
Dr. Thomas Barnekow
Dr Thomas Barnekow has more than 20 years of experience in IT sourcing, starting as a consultant at McKinsey and working as a deal maker at Accenture and IBM. Barnekow then spent almost twelve years at ISG. At Metrics, he serves as Partner Sourcing Advisory and Chief Technology Officer (CTO).