2014 in Preview – Procurement and Outsourcing

2013 was a year where many things were predicted at the start but only a few things fell into the right space. It was said that governance would finally grow but it didn’t govern the distance. Other things that was predicted and which has proven to be right is that many customers chose the ‘Do-It-Yourself’ approach for outsourcing. And the last things which went on to make a difference were the role of domestic service providers which increased over the course of the year. The other things which were predicted for 2013 but didn’t do well were – third party deals didn’t do well, China still to become an outsourcing market and also backsourcing prevailed. Many customers are more likely to open their doors for their existing vendors rather than to other third party vendors. Hence third party outsourcing didn’t go well. China still lacking in the global IT services, lack of IT talent hence China is far away from becoming an outsourcing hub. Buyers these days are quite stringent when it comes to heavy outsourcing; hence they thought of backsourcing some of the stuff in-house which in turn will help create jobs. But due to lack of IT functions and knowledge that too didn’t go down well.

2014 is year to think wise and act wise. Below are the top 4 trends that will decide the 2014’s future in outsourcing-

Procure Systems on User experience

Many enterprises these days are actively seeking employee inputs while discovering or building a new product. This is because of the wide number of web and mobile applications floating in the market which are far more intuitive. These procurement systems act as mere purchase orders (PO) machines which are under-utilized and also don’t deliver much ROI. Therefore enterprises are seeking more and more feedbacks from end users and also enduring to more IT process which will be sustainable in the long. The key focus should be on user experience and applying those in your systems and web applications. This way more there will be more gains on your IT investments.

TBL approach

TBL approach basically incorporates the notion of sustainability through the three dimensions – social, environmental (or ecological) and financial (economical). Many enterprises are adopting these three dimensional approach in their business to assess their performance. Apart from the age old norm of corporate profit, organizations are also looking at the long run sustainability of their business. Enterprises are also complying with the government regulations for sustaining their sourcing and procurement methods. This also allows them to focus on their goals and have compliance with their suppliers. This may include defining and setting up metrics around suppliers and creating a sustainable scorecard to measure the suppliers and their ratings. This will help identify the impact on supplier sustainability strategies.

BYOD

Everyone needs information on the go. For this to happen, employee must have access to business critical information. One method to address this is to provide your employees with mobile access to enterprise applications. This is because of the exponential need and growth of the mobile device. Enterprises can also classify their business applications accessed by employees on their devices. They can also use data management tools to keep track of all the data flow and will also ensure device-based operations and processes. Also while implementing these mobile method policies, below are the questions that can be asked.

• What can be done, where and how?
• What information is needed for which action?
• Where will the data be stored during the action?
• How will this action translate into results?

Governance in mobile procurement

More and more mobile devices will be used while adhering to the BYOD policies. But enterprises will face challenges when it comes to governing these. They will need to formulate policies to identify and mitigate information and data leakages. The data is always important and a key factor to the any organization’s growth. For such risks and threats, enterprise will have to adapt to strict ‘zero tolerance policies’ on violations. At the same time, the employees will have to bear that responsibility and keep the data confidential to them and avoid violating any risks. Proper governance process needs to be set up to align with end-user needs for devices and also ensuring compliance and eliminating such risks.

Governance is and always has been a tough nut to crack it and use it as a process. Other key factors that will important as well in shaping up 2014 are –

• Governance might get harder
• Big deals may get smaller and small deals get bigger
• India to go for better infrastructure
• Adopt insourcing
• Slow market in Cloud

About Author:

Mihir Sakhle is consultant and part of Systems Plus Pvt. Ltd. He is a part of consulting team that delivers Sourcing and Vendor Managementg Office projects. He can be contacted at: mihir.s@spluspl.com