It can be difficult for companies to gain a competitive advantage in today’s digital world. In business, every decision you make has consequences, and you must identify what they are before you decide to act on them.
Making purchases for the betterment of your organisation is no exception. Your company’s IT infrastructure is a supporting pillar that keeps your business afloat. The hardware and software you choose to incorporate into your IT models must have your best interests at heart.
To ensure this, it is a good idea that you undertake strategic sourcing with your IT systems.
What is strategic IT sourcing?
In simple terms, strategic sourcing is a process organisations undertake to determine whether their procurement processes are cost-effective or need improvement. It is about deciding if your business is benefiting from high-level services or products and cost savings.
Strategic sourcing also covers the vendor that is supplying them. You and the vendors that you work with exist in a symbiotic relationship. You derive value from each other’s goods and services, and you must know the specifics of your day-to-day partnership.
The phrase ‘strategic IT sourcing’ refers to strategic sourcing for IT solutions. Whether you are looking for managed IT support or considering a piece of software for promoting long-term efficiency, your organisation should never purchase an IT-related service without careful consideration. A strategic sourcing strategy can result in more fruitful investments.
Why is strategic IT sourcing important for businesses?
If a company wants to grow, it should implement strategic sourcing into its overall business strategy. Strategic sourcing helps identify suppliers with the capabilities and expertise to meet your business’s needs.
Specifically, a comprehensive strategic sourcing plan addresses two areas:
- The total cost of ownership (TCO) – the total sum of all costs associated with a product or service. Strategic IT sourcing looks at the price at the time of purchase and weighs the risks and costs of long-term investment.
- The supply chain – the process that covers the creation and distribution of a service or product. The supply chain consists of vendors, stakeholders, distributors, and more. In this space, strategic IT sourcing targets and reduces potential disruptions to supply chains that bring the most value to a business.
Approximately 30% of Australian businesses experienced issues with their supply chain in 2021. The purpose of any company is to bring peace of mind to customers. A disrupted supply chain can severely impact a business’s ability to serve the public.
Apart from affecting the quality of services on offer, it can also result in delays that frustrate customers and encourages them to turn elsewhere for their needs.
Carefully selecting the components of your organisation’s IT infrastructure can ensure that you are not investing in the wrong supplier relationships or systems not equipped to handle the modern workforce.
Whether you work with a cloud computing vendor or strike a deal with a managed IT services company, investing in the right technology solutions and their providers can help your business remain competitive in shifting landscapes.
How to undertake an effective strategic IT sourcing process
Strategic IT sourcing is not a short-term solution. Instead, the best strategy takes time to examine its business at various stages along its journey to assess its relevance to the market and vendors.
Strategic sourcing analyses your company’s purchasing activities from several angles to gain a clear picture of what is and is not working and what solutions are available to overcome issues – presently and in the future.
Several steps go into strategic IT sourcing. These are:
- Study the product or service you are interested in and its spend category. Consider questions such as, “Who uses the product?” and, “How often will it need to be repurchased?”
- Conduct in-depth market research to pinpoint the players in the product’s sphere. These corporations are potential vendors who could enrich your business with a cost-effective solution.
- Create a purchasing strategy based on your business’s objectives and budget. This can be used as the basis of any negotiations if necessary.
- Enquire about the vendor’s product or service.
- Incorporate your new vendor into your organisation’s daily operations. Transparency and open communication are essential for a seamless transition and adoption of a new solution.
- Monitor the new relationship and the efficacy of the solution.
No one understands your business better than you do. However, when undergoing a strategic IT sourcing exchange, the other party must be a supportive team who knows your organisation as if it were their own.
If your company works with another that does not understand you or is not interested in seeing both of you grow, the time and energy you put into procuring new services and meeting with representatives would have been for naught.
Strategic IT sourcing from the best
While it can be confusing to wrap your head around, strategic IT sourcing can connect your business with benefactors and solutions that enhance efficiency and productivity.
By identifying the services and products that will best fit your organisation’s needs and business goals, you can ensure that you are working with suppliers who will bring a much-needed focus on performance and results.
With years of experience, the strategic sourcing consultants at Muscatech are specialists in providing businesses with IT support and advice on the latest solutions from technology vendors. If you want your business’s money to go towards services that will encourage digital transformations and boost revenue over time, talk to the team today.