The New Power Of Sourcing And Vendor Management -- Reflected At Forrester's IT Forum

After two weeks at Forrester’s IT Forums (in Las Vegas and Barcelona) the Sourcing and Vendor Management research team came back more energized than ever. Why? We were able to spend a week interacting with our clients, who all face diverse challenges, yet remain very optimistic about the strategic value they can provide to their IT and business counterparts. While it's an exhausting week for all of our analysts, we love this week (second only to our own team's Sourcing and Vendor Management Forum in November) because of the chance to interact with all of you.  

 Coming back from this conference, I realized a few key themes had dominated my conversations with clients:

  • Big technology firms need to change policies along with their customer needs — or they’ll die a slow death.  The tech market is changing rapidly, and it’s becoming clear that the technology leaders of yesterday may not be the leaders of tomorrow. Duncan Jones spoke about this theme in his track session about the “Software Tea Party.” No, this is not about Michele Bachman’s presidential run, but rather Duncan’s view that big software companies have, for years, had the upper hand in software negotiations. Duncan articulated his view that sourcing professionals have increasing power to push back against “unfair” licensing practices from vendors — and several powerful market trends support this shift in power. You can read up on this trend in Duncan's recent research -- and in coming months, expect more research from Duncan about your options to gain leverage in software negotiations.
  • Self-provisioning continues to grow. For years, Forrester has written about the “consumerization” of IT, but it’s implications on our client base are becoming much clearer. While the level of self-provisioning varies by company, virtually every client we spoke with acknowledges that business professionals have more options to self-provision technology — with tremendous risk implications for sourcing and vendor management. At this event, we shared many stories about self-provisioning of cloud-based services, social technologies, and mobile devices. Reflecting this trend, Liz Herbert provided an update on the future of SaaS and cloud offerings (you also can see her recent research on this subject), and Clarence Villanueva is preparing to publish a report on best practices in tablet sourcing. One thing that was clear to me after this conference: If you think your business users are not self-provisioning technology, you’re probably not paying attention. This trend has the potential to dramatically change the role you play within your organization — but you'll have to be prepared to invest in new resources and internal capabilites.
  • The relevance of vendor management is increasing. Many of the organizations we speak with are thinking about how their traditional sourcing practices can evolve to incorporate more strategic relationships. Whether it’s labeled as “strategic sourcing,” “partner alliances,” or “vendor management” the need for organizations to manage a smaller set of very strategic providers — and manage them for more than just cost savings — is a clear trend.  Stephanie Moore discussed the importance of strong vendor management in an age of self-provisioning in her keynote speech, in which she argued that strong vendor management will be crucial to the future direction of ALL IT organizations. Lutz Peichert discussed the importance of governance in the new sourcing lifecycle, and Wolfgang Benkel and I were able to lead a lively track session on getting innovation from services providers. The clients I spoke with who have invested in vendor management cite benefits such as new co-creation/innovation models and stronger relationships with trusted advisors. 

If you're interested in these topics — and other hot topics like sourcing tools, offshore innovation, multisourcing shifts, and sourcing's role in unified communications — please consider coming to our November Sourcing and Vendor Management Forums in Miami and London. We always manage to pack in great content at this event but have a lot of fun too.  

Were you able to attend the IT Forum events?  Did anything trends catch your eye during these sessions that you’d like to share?  Please drop us a note and we’ll keep the discussion going.

Chris