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Analyst Watch: Reshape your sourcing strategy


By Diego Lo Giudice
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October 11, 2011 —  (Page 1 of 2)
Diego Lo GiudiceRegularly revisiting your application sourcing strategy is a must these days to ensure that you are employing the right strategy for each business area: on one side paying attention to modify your strategy as differentiated capabilities become commoditized, but likewise modifying your approach for the “differentiating” and “highly innovating” business applications.

Distinguish software that makes a difference from commodity processes and capabilities. Conventional wisdom suggests buying before building software. But as an increasing proportion of product and service value goes digital, there is a much greater scope for a firm's application development professionals to build highly competitive digital differentiation into its offering. When determining which parts should get what sort of treatment to maximize business results, app delivery leaders should consider such factors as the nature of the process to support, available technologies, IT archetype, the rate of product- or service-offering innovation, the proportion of digital content in the product offering, and channel innovation.

The secret to releasing resources for digital differentiation lies in standardizing the support for commoditized or non-differentiating processes: centralizing and virtualizing their management and support, and outsourcing them when feasible to free resources to invest in innovation. Two main options can serve this purpose:  deploying packaged software with minimal customization to minimize costs, or making SaaS part of your strategy for both commodity processes and innovation.


Related Search Term(s): sourcing

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