Sourcing Insights with a Dutch Twist

Most organizations are facing a multitude of challenges these days, including pressure on pricing and shorter lifecycles of new products. This requires organizations to become more flexible, focused on their core activities and enhance the capability to use new technologies to create or sustain a competitive advantage. When the IT department is too sheltered One of the companies busy transforming itself from a traditional, low IT density business model, to a highly digitalized business model is the company ‘Merchant’. It is a specialist in auctioning consumer products in high volumes (millions of items per day). To do so it has invested in an impressive amount of buildings which handle the inbound logistics, auction, outbound logistics and financial transaction. In the last decade both producers and buyers of the products are increasingly looking for ways to improve efficiency, including the role of Merchant to align demand and supply. As a result are producers and buyers looking

The recent bomb attack on Mumbai, killing at least ten people and wounding more than fifty, is one in a series. According to Wikipedia are “as of 2006, at least 232 of the country’s 608 districts afflicted, at differing intensities, by various insurgent and terrorist movements. In August 2008, National Security Advisor M K Narayanan has said that there are as many as 800 terrorist cells operating in the country”. While India is not the only outsourcing destination which suffers from ‘political’ unrest, are this bomb attack and the 10 coordinated shooting and bombing attacks of 2008 of a completely different order than what is going on in most other countries (except for maybe Pakistan). Also Egypt had its period of unrest when toppling over president Mubarak, and Malaysia recently caught the headlines with people demanding democratic reforms. And the Ministry of foreign affairs of Australia “advise you to exercise a high degree of caution in the Philippines because of the high thr

Technology is everywhere and is becoming of increasing importance to attract and retain consumers and engage with upstream and downstream business partners. It is changing industries, impact the roles of CEO, COO and CIO. Insurance companies are transforming their business model from selling though big, impressive marble decorated buildings and well paid sales men in Porsche cars, to a lean no fuss companies using internet as the primary sales channel. Physical newspapers are increasingly replaced by digital versions and we shop on the internet when it rains or just for our convenience. The part of the IT portfolio where time-to-market, intense business-IT interaction and innovation are the key success factors (Enabling IT). While IT plays a key role in transforming business models, consists a large part of IT portfolio still of value propositions which core attributes include reliability, availability and efficiency (Factory IT). As this category still represents the majority of the

By the beginning of the 1990’s an increasing number of IT departments started using process oriented models like ITIL, ISO/IEC 9000 and CMM(i). Later on substituted by CobiT, ISO/IEC 27002, ASL, BiSL, ISO/IEC 20000 and many more. That these models helped professionalize IT and transform themselves from a technology playground to a more business and service oriented procession is without a doubt. A survey among 503 companies on the benefits of ITIL shows that with the increased maturity of the IT function, also the realized benefits increased, while the perception of implementation challenges decreases ( 2010 [FZ1] ). From a strategic standpoint is the added value however limited as ITIL implementations can be easily imitated by competitors, leveling the playing field again. Furthermore is there a considerable risk implementations will end up in a swamp due to over-engineered procedures, templates, PPI and KPI reports and lack of fundamental understanding of the concept behind ITIL. A r

Today I was asked to give my opinion on the proposition “when outsourcing is benchmarking required to prevent a failure” by an editor of an IT magazine. My first thought was: of course it is, as including a benchmark clause in a contract was standard practice when I drafted a contract. But then I thought again and come to a less back-and-white conclusion. Benchmarking before or during the contract period is common good and big business for companies like Gartner, Alsbridge and Compass, but given the increased complexity and tailoring of the solutions provided I wonder whether their usage is not restricted to a limited set of services. Services which soon get so common that many just buy them out of the cloud. Let me explain. Many organizations outsourcing for the first time did not know what to expect from a supplier and often also have no clue about the cost of a workspace or server. They just knew the total IT budget and had a target to reduce it by 5% before next year. The bench

The Netherlands has traditionally a leading position in agricultural (Tulip anyone?), but due to the climate many crops are grown in greenhouses that have to be heated during winter. The engines used run on gas and the resulting heat and carbon dioxide are used to create the optimum growing conditions. These ‘micro combined heat and power engines (Micro-CHP) produce also electricity however, and much more than needed to provide artificial lighting during the night hours. One options to feed the access power back to the grid or to feed it directly to nearby houses and company buildings. One such initiative includes using the power of 35 engines used to heat 220 hectares of greenhouses to power a new datacenter. The access heat produced by the datacenter is in turn fed back to the greenhouses. This initiative is an example of the increased emphasis on sustainability within many industries and at the role of technology as an enabler (e.g. smart grid). Reducing the environmental footprin

The interconnections between companies and their external stakeholders become more intens by the day. The world's leading provider of lithography systems for the semiconductor industry, ASML, is a company where several hundred  external business partners are very closely integrated in the design, development, integration and servicing of the systems used to make CPU’s, GPU’s, memory modules and other advanced microchips. Up to 90% of the total system costs are supplied externally and business partners several tiers deep in the supply chain have access to relevant technology and product development information from ASML. It allows ASML fast access to new innovations created throughout its value chain, without the need to invest themselves in all these areas. ASML focuses on the high value-added integration role, including product competence and manufacturing cycle times while the business partners design and manufacture specialized subsystems. But not only suppliers become part of t

Imtech is an example of a (Dutch) Tier 3 supplier which has been successful in closing several considerable IT deals (e.g. deal of 124 million euro). One of their success factors in my opinion is their diversification strategy. They are not only strong in IT, but also in engineering disciplines like Mechanical and Electronics. This has three benefits: Delivering engineering services to for example companies active in the automotive industry ensures Imtech has solid knowledge of that vertical, which can be leveraged on by the IT discipline. The disciplines Mechanical Engineering, Electronics and IT are fusing increasingly together within many types of industry, requiring cross functional knowledge to deliver maximum added value as a company (or partner with other suppliers). Having a contract with a company to provide electronic systems to control the chemical processes of a company, ensures there is an existing relationship the account managers of the other disciples can b