From reactive to strategic: how procurement and sourcing teams can drive the future of IT

In a world where companies are increasingly dependent on technology, the role of IT Procurement is evolving from a supporting function to a strategic driver. While IT sourcing projects used to revolve around cost savings and comparing quotes, they now revolve around speed, flexibility, sustainability, transparency, the right partner ecosystems, and value creation for the business. Here's how IT Procurement and Sourcing teams can make this transition—and what it means for process design, supplier collaboration, and the role of the CIO or CPO. 

1. The evolution of IT sourcing: a brief look back

  • First: sourcing = "who delivers the cheapest"; focusing on price and contractual enforcement.
  • Today: sourcing = "how do I get maximum value, innovation, and agility from my partner ecosystem?"

The increasing importance of third-party risks, especially in the case of outsourcing, also means that sourcing work can no longer be carried out solely within the IT department.

 

2. Practical: How do you make the transition to a strategic sourcing approach? 

Step 1: Approach IT with a different mindset 

  • Don't just look at IT sourcing from a cost-saving perspective, but from a strategic perspective: what do we want to achieve with IT as an organization?

  • Involve business stakeholders immediately in the sourcing process: the real needs, future plans, changing market conditions... they know these better than procurement and sourcing professionals. 

Step 2: Establish Structure & Governance 

  • Define clear supplier strategies: what is a "partner"? What is a "supplier"? When is someone considered "strategic" or "critical"?

  • Consider metrics that go beyond price: innovation, sustainability, collaboration, etc. 

Step 3: Leverage data & tools

  • A structured spend analysis is a good starting point: what are the costs, where are the inefficiencies, and which suppliers are "critical"? Tip: use the Kraljic matrix.

  • Consider how you will monitor suppliers and contracts: establish an approach for contract and vendor lifecycle management. 

Step 4: Change Culture & Collaboration

  • Bring sourcing, IT, business, and suppliers closer together: co-creation instead of confrontation.

  • Facilitate continuous evaluation and adjustment instead of "set-and-forget" contracts.

  • Focus on supplier development: why not build innovation together, instead of just purchasing? 

3. Example case: sourcing in practice 

Consider, for example, an organization that recently wanted to consolidate SaaS contracts. Traditionally, the focus was purely on license prices per user. However, the new approach: 

  • Usage data was examined to determine which modules are actually being utilized.

  • The vendor's future roadmap was assessed and how it aligns with the business strategy.

  • Contractual risks were identified, including exit scenarios, data portability, and vendor lock-in.

  • An approach was developed with additional partners for integration and support. 

The result: a contract with a slightly higher license price, but with better scalability, lower implementation costs, and a roadmap that aligns with the business. In short: value-based sourcing instead of price-driven sourcing. 

4. Your action plan for the nex 90 days

  1. Conduct a quick scan: where does your sourcing function stand? Which suppliers are critical? What risks have been identified? 

  1. Organize a workshop with stakeholders: sourcing, IT, business units, legal/compliance.

  1. Define KPIs for suppliers: combine costs, quality, innovation, and risk.

  1. Implement a pilot: choose one topic or category and apply the strategic sourcing approach. Evaluate after 90 days and expand.

  1. Communicate the transition: internally and to suppliers: "We want to collaborate, create value, not just purchase." 

 

5. Conclusion: The Three Core Challenges for IT Sourcing Teams

Complexity in the vendor landscape:

Organizations are increasingly working with multiple cloud providers, integrators, specialists, and platform vendors. 

Cost control and value creation:

Not only are "low costs" important, but also: what does the vendor deliver? Think of innovation, time-to-market, quality, and scalability. As explained in a previous blog post about SaaS costs: the cheapest option sometimes turns out to be the most expensive if you don't consider the bigger picture. 

Risk management in the ecosystem:

If you have a broad network of suppliers, risks arise: legal, compliance, geographical, lock-in, reputational... Therefore, it's essential to link IT sourcing and vendor management to IT governance. 

Conclusion

The role of sourcing in IT is changing dramatically. For organizations, this means that sourcing teams must position themselves as strategic partners that drive business forward. By focusing on value, ecosystem thinking, data, and collaboration, organizations can truly drive the future of IT, rather than being driven by it.

Curious how PACT Association can help you shape this transition in your organization?

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