Core Competencies Needed In A Digital World

by CXOtoday News Desk    Jun 16, 2014

digital world

As organizations are moving to digital business models, there is a need for greater IT agility to meet changing business strategies and requirements. Traditional sourcing strategies that are either too centralized or not centralized enough, too customized or too industrialized, actually reduce, rather than enhance, agility, states Susan Tan, research vice president at Gartner, in a recent blog, explaining how service providers need different core competencies to succeed in a digital world. 

“Businesses are embracing adaptive sourcing, which addresses shortcomings in existing traditional sourcing strategies and management with a three-layer approach to services  - innovate, differentiate and run - each with different service requirements, value expectations, governance, architecture, and vendor and risk management. The adaptive sourcing model will support the differing needs of the business for services in different layers,” explains Tan. According to her, when both buyers and service providers embrace this approach, a closer alignment of an IT services provider’s performance and the client expectations ensue. 

Tan believes this is based on the following key findings:

- The three layers - innovate, differentiate and run - are present in every client’s IT and process environment, and a provider may play in one or more layers, either directly or through partners, she says. Because of the need to integrate data and systems across different layers, service providers will need to work more collaboratively with other providers in multi-provider environments.

Tan also states that adaptive sourcing layers are not static. A service initially introduced and offered in one layer will migrate over time, requiring a different focus and expertise (and, possibly, a different service provider).

Moreover, as organizations accelerate their move to the digital business model, clients are more open to using a new service provider for innovative services  in response to the need for different capability requirements from service partners to help them navigate the digital journey successfully. Innovate services give nontraditional and agile service providers the opportunity to unseat an incumbent.

in the blog she further states that service providers that embrace the adaptive sourcing model will be better positioned to participate in their clients’ digital journey, demonstrate relevancy, bring the right value, address the needs of their expanding audience of buyers/influencers and position as innovation partners.

Tan suggests each adaptive sourcing layer requires different skills and core competencies. Only the largest firms have the investment potential to be a player in all three layers. Midsize and smaller service providers will need to focus on one to two service layers in which to invest and excel.