Is your company “driven to software”?  Meaning that your core business is not build on software, but you are now driven to fully digitize by market forces?

This article talks about the changing nature of the workforce once a business goes digital and all its interactions with customers, suppliers, employees and investors are mediated by software. Scarce but necessary skills will not come from any one provider; a mix of vendors will become the norm, and hierarchical management ineffective.

Acquiring the capabilities you need to go digital

Some of the talent and tools won’t necessarily be found in-house. Here’s how to create a sustainable strategy for sourcing the right people and products.

McKinsey Insights March 2015 | by Matthias Daub and Anna Wiesinger

Digital capabilities are now a prerequisite to compete in the long term.1 Yet many companies seeking to go digital are still unclear about the best way to set up their IT organizations and develop the tools and talent required to manage digital information and establish and maintain online services and automated processes.2 What most don’t properly acknowledge at the outset is that many of the critical resources required to facilitate this transition will not be available in-house.

Sourcing for digital is different

In the fast-moving world of digital, finding the necessary tools and talent can be challenging for several reasons.

Sourcing for digital differs in a few key ways.

Traditional Sourcing Digital Sourcing
The focus is on cost The focus is on talent
Project scope and development is fixed. Project scope and development is ever changing.
IT functions are siloed and solutions are autonomous. IT functions are integrated and solutions are shared.
Large systems integrators dominate an established market. Small niche players dominate a fragmented market.
Companies pursue long-term contracts with complex service-level agreements. Companies pursue short-term contracts with flexible deal mechanisms.
  • Talent has become more important than cost
  • The scope of projects is ever changing—and must be managed that way
  • Integration and accountability are more critical than ever
  • The supplier market is fragmented
  • New deal mechanisms are required

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Most important to understand is that within a competitive digital firm, talent will trump cost.  Contact us to discuss what this means for your firm.