Wall Street Tech Review: Confessions of a Serial Sourcer

Today's Expert: Thomas Young, Partner, Information Services Group (ISG)

Topic: Contrarian Confessions and Lessons from a Serial Sourcer for Wall Street Tech in 2013

In the following discussion with Thomas Young, the Information Services Group partner shares his lessons learned from 15 years spent as an “outsourcing mercenary” – and his beliefs as to how the industry must change to improve results for buyers and providers alike. Young will discuss these and other impressions during Wall Street Tech, which will explore T5 – the five technology-related trends creating opportunity, challenge and risk for banking, financial services and insurance organizations.

Produced by Outsourcing Institute, Wall Street Tech Conference & Exchange in Association with Forbes Magazine is scheduled for March 13, 2013, in New York City. 

**Attendance is free for practitioners.

Outsourcing Institute: Some believe the current system of buying outsourcing solutions is broken. How can it be fixed?

Thomas Young: The issue is that the T5 issues that are listed are changing the landscape of the technology services market. The rate of change from the T5 is exceeding the collective rate of learning in the industry.  As such, as time progresses, the disconnect between our learning and practices become out of date and disconnected from the new market realities. Cloud computing, analytics, Big Data – when people delve into these areas, they’re overwhelmed. They’re saying, “I have no idea.” That’s where the collaborative contracting model comes in.

 

OI: What’s the fundamental change you believe is needed in the marketplace?

Young: For outsourcing professionals and IT leaders, we need to re-examine everything we are doing and the way we do it.  RFPs need to give way to more flexible RFS approaches. The way we’ve done business with complex service agreements in the past is not the way I would do it today. Cutting a five-year, static operating agreement is a fool’s errand. Even if you got it perfect today, it wouldn’t be perfect in nine months.

Multi-year contracts with static operating models need to give way to flexible commercial partnerships. The foundation should be a handshake agreement on a set of principles you agree to operate under. It would be an easy-on, easy-off, if it’s not working out by mutual consent.

 

OI: If we’re to change the model so dramatically, what would the criteria be?

Young: Instead of choosing a vendor by SOP, I believe we need to use soft criteria – how are their references, do I like them, do I trust them. Trust has to be foundational, then you work to get a good deal.  It matters most who you pick, not the lowest price. Not about the terms or SOW. That is not a correlation to success. You need to sit down and establish an open framework of operating principles. [With the pace of change in the industry], you cannot use a commodities purchasing approach – an RFP – any longer.

This will threaten procurement professionals’ world. Some recognize the threat is already there – the threat that they’re becoming irrelevant to the way business operates. Business people see procurement professionals as a hurdle to overcome, not a partner to help achieve their goals. If you want to start to shift that perception as a procurement professional, learn the business you support – whether it’s banking, insurance, manufacturing. Know the issues your client is dealing with. You’ll have a better understanding of where to inject nuance into the process, as opposed to when strict compliance is appropriate. With existing players, you’ll see a lot more losers than you will winners, and more new players and new thinking driving the industry. You have to constantly look for the next Google or Apple or player who will change the game.

Outsourcing Institute’s Wall Street Tech Conference & Exchange in Association with Forbes Magazine was created by Frank Casale as a one-day power briefing for the top IT and Tech sourcing execs from across the BFSI industry. It will explore T5 – the five technology-related trends creating opportunity, challenge and risk for banking, financial services and insurance organizations. 

This groundbreaking symposium and networking session is free to practitioners.

Those interested in attending can visit the Wall Street Tech website to view the agenda and register. Sponsor inquiries should be directed to Jared Gleason at This email address is being protected from spambots. You need JavaScript enabled to view it. .  

 

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Bill has been a member of the technology and publishing industries for more than 25 years and brings extensive expertise to the roles of CEO, CIO, and Executive Editor. Most recently, Bill was COO and Co-Founder of CIOZone.com and the parent company PSN Inc. Previously, Bill held the position of CTO of both Wiseads New Media and About.com.

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