Sourcing Must Adapt Digital Business Goals
Analyst organisation Gartner says businesses need to change their sourcing strategies if they want to keep pace with digital revolution.
Some of the IT-enabled products such as smart shoes and autonomous cars are just a few of the services businesses are developing and Gartner says this means a great deal of outsourcing for IT departments.
At Gartner’s annual outsourcing event in London, known as the Gartner Sourcing and Strategic Supplier Relationships Summit 2015, keynotes and presentations were dominated by the speakers’ emphasis on the need to digitise business and the sourcing challenges that come with it.
Analyst at Gartner, Helen Huntley, began her keynote with figures demonstrating the rapid onset of digital business expected over the next few years.
According to Hunter, CIOs said that in 2014 22% of revenue was generated by digital products and services – and this is said to reach 41% by 2019.
She said most companies don’t even know who their main competition will be in a few years’ time because so many new entrants are arriving from the outside.
Several Gartner analysts referred to Kodak when warning businesses to harness digital, as the company who once brought photography to the masses declared bankruptcy in 2012. Kodak failed to react to the digital revolution and becoming the next ‘Kodak’ is a fear for many business leaders and CIOs.
Gartner says CIOs will play a critical role as the delivery of any digital product requires significant integration work, however at a time when the importance of IT and the CIO to the business is on the rise, the CIO controls less of the budget. Research from Gartner shows that in 2015, 38% of IT spend will fall under the control of the business, rising to 50% in 2019.