Sourcing Insights with a Dutch Twist

This blog shares part of its content with this older blog . I included this blog in my upcoming book but added more content. I hope you will find it useful. Cost cutting is still one of the key reasons to outsource parts of the IT portfolio. There are many other sources of financial benefits hidden within these deals however. Deals which often involve large sums of money, a multiyear commitment and a considerable risk of failure. Properties which are not unlike a M&A deal. At first sight may outsourcing and M&A not share many similarities, but at the core are both about one company buying assets from another company, with the aim to make a profit. M&A deals tend to be much larger in value however, which has resulted in developing best practices to both maximize and protect deal value. One of the key differences between an outsourcing and M&A engagement is the stronger focus of the latter on the exit. If a private equity house buys (part of) a company, most value

It sometimes looks like everybody can develop an App or website these days as the entry barrier is relatively low. Everybody with some rudimentary knowledge on software development can produce a simple App. This combined with a huge demand in the market for Apps, has resulted in an explosion of vendors which try to get a piece of the cake. And subsequently pressure on price. Besides labor cost is the number of functionalities one of the key drivers of the development price. And with App development being a relatively new area, are many client companies finding their way in defining the right scope. Building a App which is supposed to unlock business rules and data from internal (back office) systems is not something you do on a rainy Sunday afternoon. App vendors and client companies should be aware of the impact (and risk) of building a proper B2C or B2B App. I have seen client companies picking the cheapest vendor and finding out after three months that a large part of the funct

This blog is a small excerpt from the second chapter of the book I’m writing on Business IT convergence. One of the topics this chapter discusses, is the need to identify and unlock the value which is embedded within the context of the demand of the business for a new IT solution. When designing and building new IT solutions, all questions from IT (and its external suppliers) for the business were traditionally focused on the functionalities. The business rules, the business process, the interface and data that have to be translated into a working IT system. The context of the demand (e.g. relative importance of time-to-market versus efficiency) is typically considered to be of little importance. This was and is indeed the case for situations where IT is used to automate business processes; the traditional sweet spot for IT. With IT increasingly used by the business to compete in market space and technology changing complete business models, the context of the business demand become

I spoke recently with a senior executive of a small external service provider. A service provider with a staff of 350+ in the year 2000 and some 75 today. So one of the main topics we discussed was how this happened. The founders of the company identified some twenty years ago a software niche in supply chain management. In this period manufacturers and their up-and downstream partners in the supply chain were looking for solutions to exchange information to optimize their logistics processes and stock levels. The founders came up with some very clever concepts and for many years the sky was the limit. What the founders and subsequent managers overlooked however is that every (software) product goes through a lifecycle. And at the end of the lifecycle the software product has become obsolete. It may become obsolete because of not anticipating on evolving functionalities, technologies (e.g. Cobol) or because business models. Functionalities. In the past many software vendor