The top 20 technology sourcing trends of 2021

17 March 2021 Consultancy.eu 4 min. read
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Global consulting giant KPMG has released its annual view on the top technology sourcing trends, identifying digital developments that are touted to disrupt the sourcing landscape.

The research – conducted by the firm’s Dutch arm – has found that technology is revamping the way organisations of all sizes are designing and delivering their sourcing models. Meanwhile, technology also serves as the linking pin between new models of cooperation between clients and service providers, and the rapid much-needed acceleration of digitisation in sourcing fuelled by the unprecedented impact of the Covid-19 pandemic.

Across the sourcing value chain, dozens of technology-driven trends are popping up, and according to KPMG’s research a set of twenty IT sourcing trends for the next years are ‘here to stay’. To come to its findings, the Shared Services and Outsourcing Advisory practice of KPMG conducted a literature review and amassed both client and consultant views from dozens of engagements it has under its belt worldwide. 

2021 Digital Sourcing Trend Radar

The top five short-term digital sourcing trends identified by KPMG are: 

Best of breed sourcing strategies

Organisations are moving away from ‘one size fits all’ delivery models. The need to adopt, integrate and/or migrate new IT solutions and digital services is faster than ever before. The ‘best of breed’ sourcing strategy offers a more granular approach to choose the right balance in sourcing new, upcoming and proven IT solutions, services and delivery models. 

Relational outsourcing agreements

Transaction-based outsourcing has dominated the sector for decades. But all too common is according to KPMG that transaction-based relationships fail to achieve client objectives and cater to the business needs. As a result, using relational outsourcing agreements to differentiate and enhance contracting is gaining popularity. 

Insourcing of integration functions

The shift towards best of breed sourcing strategies has significantly increased the strategic value of client service integration and service orchestration capabilities. KPMG’s researchers note that a fair share of client organisations are insourcing (part of) their service integration and orchestration capabilities and developing these capabilities inhouse, often supported by service providers.

Agile based tendering approach

Another growing trend is the adoption of agile working in tendering. In this methodology, the selection process follows a planning of sprints with predefined requested deliverables and selection criteria with more touch points. This adds more alignment and flexibility to the tendering process, as well as allows clients to engage with vendors earlier in the process.

Hybrid sourcing models

Managed IT services are increasingly combined with cloud-based services creating hybrid sourcing models. While public and private based as-a-service delivery models clearly provide tangible benefits, the majority of organisations do require a mix of dedicated IT solutions and cloud-based services for the foreseeable future.

More long term digital sourcing trends include cloud robotics, blockchain based contracting and so-called SecOps automation – the field at the intersection of security and operations to foster better cybersecurity management.

Across these trends, “we are seeing that the increasing digitalisation of the client value chains results in an increasing amount of (inter)dependencies between client, digital solutions and respective service providers,” said Mark Beukers, a partner in KPMG’s Digital Sourcing service line.

“Managing these (inter)dependencies in a fast-paced market is difficult to organize internally. As such, we witness client organisations setting up ‘partner ecosystems’ to facilitate a more effective management of these (inter)dependent and complementary capabilities,” added Kees Stigter, also a partner in the Digital Sourcing service line.

For details on all twenty IT sourcing trends, download KPMG’s 2021 Digital Sourcing Trend Radar.