Polysourcing demands radically different IT governance (1)

IT is becoming increasingly decentralized. This leads to fragmentation of IT activities. To ensure that IT still contributes maximally to the organization's strategic objectives, you will also need to decentralize parts of your IT governance. In two blogs, I will explain the cause of decentralization, its impact on outsourcing, and how organizations should restructure their IT governance. This first blog focuses on the cause of decentralization and introduces polysourcing, a new sourcing form that goes beyond multisourcing.

Polysourcing, IT Governance, Decentralization, Multisourcing, SaaS (software as a service)

Outsourcing of the first generation was straightforward: the entire IT landscape was outsourced to a single supplier who had to provide IT services that met the agreed-upon service levels and performance agreements. In later outsourcing, organizations deal with this more nuanced. The IT landscape is divided, and for each domain, the most suitable supplier is selected: multisourcing. This often results in better service in certain areas but introduces the new problem of service integration: who is responsible for ensuring that the services of different suppliers work as one seamless service? 

In today's outsourcing, I see a movement that goes beyond multisourcing. There are increasingly small domains in the IT landscape, and for all these different domains, there are not only multiple suppliers but also different delivery models, work methods, and different contributions that IT components must make to the organization's objectives. I call this polysourcing. 

In polysourcing, organizations place responsibility for IT in different places. Whereas in the past, this responsibility was mainly centralized, a hybrid approach is now required. 

Polysourcing and decentralized responsibility

Due to the maturation of cloud services, many organizations choose to procure generic business applications (such as packages supporting financial and HRM processes) as a SaaS service. The choice of SaaS services for generic business applications generally lies with those responsible for the processes, in this example, the Finance and HRM departments. 

Specific (custom) business applications are increasingly being developed in an Agile manner in Scrum teams. If these teams are also responsible for management, and the business is involved (Business DevOps), then the responsibility for the proper functioning and achievement of the objectives of these business applications is decentralized to these teams. 

Employees are also taking on more responsibility, thanks to the increasing implementation of Bring Your Own agreements. We not only see employees choosing their own devices but also their own apps more frequently. This gives employees not only the responsibility to ensure a working device but also access to the applications and data they need to perform their work. 

The decentralization of responsibility goes even further. Organizations are increasingly working in chains, where parts of IT are provided and managed by chain partners. 

Then there is also the supporting IT, which provides some central and shared facilities such as networks, hosting, and printing. This supporting IT is the traditional responsibility of the Automation department. 

What does decentralized responsibility mean?

The responsibility for parts of IT is shifting: to the business, to employees, to Scrum/DevOps teams, to chain partners. More specifically, the following responsibilities will be decentralized: responsibility for service management, responsibility for integration with other parts of IT, and responsibility for implementing innovation. 

However, these decentralized activities must still serve the organization's strategic objectives. How this can be managed in IT governance is the subject of the continuation of this blog. 

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