Supplier Management and IT Sourcing Complexity

Karl Flinders ( summarizes the Forrester Research events in London at the recent Architecting Tomorrow’s Business Outcomes conference. Here are the highlights:

IT services contracts and expectations are misaligned

  • 69% of sourcing executives are not satisfied with their IT services. According to Forrester’s Lutz Peichert “it is not that the the supplier is not delivering, but the contract does not reflect the reality…if a contract is five years old it might not match the reality any more.”

The digitization challenge

  • “According to a Forrester survey of global sourcing executives, 65% said they are excited about the changes that digital technologies will bring [cloud, mobile and business intelligence], but 62% said the business lacks the skills to make the change and 68% said they don’t have the right policies and business practices.”

Software status quo needs to change

  • Forrester analyst Duncan Jones describes the four software giants – Microsoft, SAP, Oracle and IBM – as “technoligarchs.” Using standard procurements tactics are not the way to go with these suppliers. One tactic is for businesses to “tier suppliers, with the benefits and commitment for both parties rising with the ranking.”
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