It takes a technologically nimble and well-managed enterprise to take advantage of today’s fast-changing market conditions. Eschewing the plodding, monolithic business models of the past, today’s best-run businesses rely on interchangeable, best-of-breed approaches that allow them to adapt on the fly and seize market opportunities others miss.
Multi-sourcing brings speed, but also complications
At the heart of such speed and agility is the practice of multi-sourcing, a business model that has been on the rise for many years and is now considered a secular trend. But many enterprises still struggle with managing and integrating so many service streams to achieve their desired business outcomes.
From the supply side, service providers and system integrators find themselves competing for many smaller, unbundled contracts, working feverishly to wring every drop of business from today’s changing market. Solution and product vendors are emerging from everywhere, and the pace of innovation and solution development is only gaining speed. After Silicon Valley, places such as Israel and India have become meccas of IT innovation and entrepreneurship. Mergers and acquisitions continue to define the IT industry, and consolidation activity promises to gain momentum in the coming years.
Because technology now plays a leading—and not just a supporting—role in the transformation of so many industries, companies are facing Hobson’s choice when it comes to managing multiple providers. In other words, they can take it or leave it, but leaving it would mean certain death. Multiple, integrated solutions and providers are essential parts of nearly every successful business’ IT landscape today.
If dealing with an ever-expanding IT ecosystem is a mandate for enterprises, then developing the organizational maturity and capability of integrating and managing services purchased from disparate and specialized vendors is a necessary part of it. This means automating multi-vendor governance capabilities and leveraging tools and processes that help integrate the delivery and management of services from an end-to-end perspective. The fast-developing ecosystem proffers a strategic choice: to buy services (outsource to a third party) or to build services (develop in-house capability and implement within the enterprise). And, at the risk of stating the obvious, there’s no one-size-fits-all answer.
Thinking about how to manage the day-to-day processes and communications needed to integrate service components is not a very exciting topic against the noise of new digital capabilities like automation and data analytics. But as mundane as it may seem, buying or building service integration and management is critical to the future success of an enterprise.
The days of “one-throat-to-choke” partnerships between enterprise and services providers are numbered. The time is now to pay attention to how solutions connect and how providers relate to one another. Looking toward an uncertain future in which it seems nearly everyone’s head is in the cloud, getting down to brass tacks will make all the difference.
Dinesh Goel is a partner responsible for the India business of Information Services Group (ISG). He has his finger on the pulse of the Indian and global outsourcing industries and provides expert insight on outsourcing and related issues.
An accomplished management consulting and sourcing professional, Dinesh advises ISG’s clients on various aspects of their global service delivery strategies across IT outsourcing and business process outsourcing (BPO) services. His extensive experience includes working directly with a leading BPO service provider coupled with a strong management consulting background of more than 10 years, where his role involved advising clients on business strategies, IT implementations and operational re-engineering for efficiency improvements.
Dinesh is a trusted voice on outsourcing for The Economic Times, The Wall Street Journal, The Times of India and Forbes India. He provides insight on the industry as a whole, global outsourcing contracts and India-based providers.
The opinions expressed in this blog are those of Dinesh Goel and do not necessarily represent those of IDG Communications Inc. or its parent, subsidiary or affiliated companies.