Over-reliance on external contractors can lead to a weak internal skills base and reduced crisis responsiveness. But there is an alternative…

In the past year or so, many businesses have embarked on digital strategies that accelerated cloud adoption.

In doing so, many have realized the need to govern their IT infrastructure differently, in order to access suitable services for their specific requirements in the right way and at the right time.

Amid this reinvention of the role of IT in their business, a new trend of ‘smart sourcing’ has emerged. Smart sourcing is the strategic way of taking competent control of IT infrastructure by making the right decisions for organizations to become more agile and flexible. This ultimately results in more freedom to innovate rapidly as technology advances.

Outsourcing vs smart sourcing

Many organizations have learned that, while outsourcing can bring them the required performance in the short-term, retaining key knowledge is vitally important over the long-term to avoid the vicious cycle of reducing capability and increasing dependency on third-party providers.

Consequently, the trend is shifting to in-sourcing and smart sourcing. This empowers organizations to take control of their technology by upskilling their in-house teams. 

There is still debate around the best way to harness technology: a debate that is made more complicated because no two organizations have the same estate and architecture as starting points. So as a crucial first step, each one needs to understand its current situation and desired destination, in terms of services and technology.

Alongside the significant drive to take up cloud services, the shift to insourcing and smart sourcing has occurred because not all leaders of organizations are convinced by the ‘cloud-first’ approach, even though most recognize the intrinsic role of the Cloud in their plans.

As a result, many organizations are now transferring specific sets of data and applications into public and private cloud repositories. This trend has been accelerated by the pandemic, to the point where it is unlikely that there is any organization in the public sector that has not looked, or is not looking, at the cloud and the best ways to source its technology requirements. 

A good middle ground

The accelerated adoption of cloud technology, coupled with a growing appreciation for the need to bolster in-house IT expertise, is encouraging more businesses to consider smart sourcing as a more flexible approach that allows scope for procuring the ‘best of breed’ solutions.

Smart sourcing can provide a fruitful middle ground between fully outsourced and in-house delivery of IT services that maximize the benefits of both worlds to create a future-proofed technology environment.

The method can also help organizations find the right blend of cloud platforms, including hybrid and on-premises systems, to create a multi-cloud approach that meets their unique demands. Smart sourcing also enables organizations to balance investments in external and internal skills, paying for the former only when there is real value in doing so, and building up the latter to increase control over the long-term.

With the flexibility and agility required in today’s digital world, smart sourcing is a continuous process, not a one-off event. It is a mindset that empowers IT leaders to get the best combination of technology services and suppliers for their organization as their needs evolve.

So, what steps can organizations take to try out smart sourcing?

Getting started

One of the first steps to smart sourcing is to map the organization’s current services and technology architecture, including that of any existing outsourcing contract. This tracks how it is performing and tracks its effect on customers, thereby allowing organizations to understand how it can be managed for optimum results.

Another key is a thorough understanding of the organization’s information architecture, along with assessment of the critical or commodity nature of each element. Inevitably, as elements change, there are impacts on other parts of the whole. Knowing exactly which components fit where is essential to making a good start.

It is also vital that organizations ensure that their teams’ skills and knowledge are retained and invested in education, especially because keeping a core internal team offers a degree of agility. In the main, smart sourcing is around out-tasking and not out-sourcing, so knowledge is rarely impacted.

Ultimately, while big changes in technology and business management can open up new opportunities, there is no one single approach that is likely to provide the best solutions for all organizations.

Many are thereby coming to realize that smart sourcing brings the benefits of both in-house and third-party skills and allows businesses to maximize the benefits of the cloud services they leverage.

In turn, businesses can have the ease of mind to focus on their strategic goals to innovate in this competitive landscape while still taking control of their IT and achieve high levels of effectiveness.

Getting smarter with IT

The accelerated adoption of cloud technology, coupled with a growing appreciation for the need to bolster in-house IT expertise, is encouraging more businesses to consider smart sourcing as a more flexible approach that allows scope for procuring the ‘best of breed’ solutions.

Smart sourcing can provide a fruitful middle ground between fully outsourced and in-house delivery of IT services that maximises the benefits of both worlds to create a future-proofed technology environment. It can also help organizations find the right blend of cloud platforms, including hybrid and on-premise systems, to create a multi-cloud approach that meets their unique demands. It also enables them to balance investment in external and internal skills, paying for the former only when there is real value in doing so, and building up the latter to increase their control over the long-term.

With the flexibility and agility required in today’s digital world, smart sourcing is a continuous process, not a one-off event. It is a “mindset” that empowers IT leaders to get the best combination of technology services and suppliers for their organization as their needs evolve. It requires smart thinking to maximise the plethora of cloud options available – treating multiple suppliers as a menu from which to find the right fit for their organization.