Smart Partnering Strategies Pay Big Dividends

By Karen A. Frenkel  |  Posted 06-19-2013
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To understand why and how IT organizations are sourcing, and recent shifts in their strategies and motivations, IBM’s Center for Applied Insights conducted a study, “Why Partnering Strategies Matter: How Sourcing of Business and IT Services Impacts Financial Performance.” The study found that although initially outsourcing revolved around cost reduction, senior and C-level executives’ motivations have changed. In their quests to succeed, they seek external partners to help drive innovation rather than just to bring down costs. As social, mobile, cloud computing and big data converge, these leaders expect change and want to prepare for it early, capitalizing on opportunities to innovate.

“This shift in mindset––bringing strategic capabilities in, versus sending work out ––is one reason enterprises are balking at the word ‘outsourcing’ to describe these sourcing relationships,” the report notes.

IBM sampled 1,351 sourcing decision-makers from around the world. Seventy percent are in mature market countries: Canada, France, Germany, Japan, U. K. and the U.S. The remainder is in growth markets, including Australia, Brazil, China, India, Russia and Singapore.

Partnering Strategy Matters  Decision makers who source to drive innovation are outperforming their peers in terms of revenue growth, gross profit growth and other financial measures. They are designing and managing services relationships by tying metrics to business outcomes, including process effectiveness, competitive advantage and business innovation.

Smart Partnering Strategies Pay Big Dividends
Karen A. Frenkel writes about technology and innovation and lives in New York City.

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