Information Technology Sourcing Best Practices Guide


Unravel IT sourcing models and strategies to gain a competitive edge.


This extensive report discusses information technology sourcing and IT sourcing best practices.

IT sourcing best practices guides IT managers in planning and managing IT sourcing activities. The best practices cover the sourcing models currently applied for sourcing in IT, considering local needs and requirements.

Sourcing is to get something, such as a service or product, from a provider. Outsourcing is to get something from an outside provider, while In-sourcing is to get something internally from an inside provider. Everything in an enterprise can be outsourced except the core business processes.

The reason for sourcing is to gain a competitive advantage in an accelerating business world.
Some of these drivers are:

  • Meeting a business need in terms of time, cost, efficiency, and effectiveness
  • Change business or organization
  • Change service provider
  • Have access to technology or expertise that is not available internally
  • Minimize risk by transferring or sharing
  • Improve focus on the core business
  • Improve cost control

Sourcing can be done in many different ways. Some are Traditional, Co-sourcing, Multisourcing, Alliance, Joint venture, and In-sourcing. Selecting which way to source depends on the situation, goals, and objectives behind the decision.

Two parts are associated with the sourcing model: Ongoing Sourcing Management and Sourcing Life Cycle. These two are essential in planning and monitoring how the sourcing process is handled. The Ongoing Sourcing Management and Sourcing Life Cycle address everything from analyzing the sourcing project to completion.
Some of the best practices that made the sourcing process a success are:

  • Implement a sourcing model and source governance
  • Build a business-aligned sourcing strategy
  • Choose the right service provider
  • Build a robust, accurate, and valuable contract
  • Establish long-term relationships with service providers that is built on trust and confidence
  • Manage organizational change
  • Ensure skills
  • Manage sourcing risks
  • Manage change of sourcing environment
  • Measure and evaluate the performance

This guide provides a wealth of knowledge that CIOs can leverage to tackle real-world challenges in the realm of IT sourcing. Here are some ways CIOs can use the learning from this document:

  1. Defining an IT Sourcing Strategy: The report emphasizes the importance of a well-aligned sourcing strategy supporting broader business objectives. Using the insights, CIOs can formulate or refine their sourcing strategy to ensure it is focused on driving business value and competitive advantage.
  2. Choosing the Right Sourcing Model: The guide outlines several sourcing models, such as traditional, co-sourcing, multisourcing, alliances, and joint ventures. Understanding these models can help CIOs identify the right one based on their business needs and resources.
  3. Vendor Selection and Relationship Management: The document underscores the importance of selecting the right service provider and maintaining a long-term relationship built on trust. CIOs can use these guidelines for vendor selection and management and for fostering partnerships that yield mutual benefits.
  4. Risk Management: The report outlines strategies for risk minimization in IT sourcing, which can help CIOs manage potential risks associated with sourcing, like confidentiality breaches, service interruptions, or vendor mismanagement.
  5. Performance Measurement and Evaluation: The guide highlights the need for continuous performance measurement and evaluation in IT sourcing. CIOs can develop key performance indicators (KPIs) to track the effectiveness of their sourcing strategy and make data-driven decisions.
  6. Managing Change: The document provides insights into managing organizational change related to IT sourcing. CIOs can use this knowledge to mitigate resistance and ensure smooth transitions during sourcing-related changes.

In sum, the learning from this document can serve as a comprehensive roadmap for CIOs to optimize their IT sourcing strategy, thereby boosting efficiency, reducing costs, managing risks, and driving innovation.




This Information Technology Sourcing Best Practices Guide has been accessed 373 times.
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