The impact of Digital business models is a hot topic for nearly all corporates and one of the key areas strategic advisors focus on. In 2014, McKinsey issued a series of articles on Digitization. In one titled “Reinventing IT for Digitalization” they state that “companies seeking strong digital performance must thoroughly transform their IT functions”.
They claim that in order for incumbents to compete against digital attackers and even create a new strategic advantage, multiple elements have to be addressed. Those are
- Clear, central business leadership on digital
- Elite IT talent
- Sourcing arrangements to scale the workforce rapidly
- Agile development and rapid releases
- Rapid innovation architecture supported by stable services
- Scalable cloud-based infrastructure
- High-quality integrated data
Several of the elements stated by McKinsey can successfully be addressed by a proper sourcing strategy and a high level of automation in its implementation – the core competence of pliXos:
Topic 2: Elite IT talent
McKinsey states „Reinvention often requires an influx of new IT talent to bring in leading technology practices. However, one common complaint among traditional companies is that top talent is attracted to leading technology players and start-ups“
Our interpretation on this topic is that obtaining elite IT talent to work for a company requires building on the global pool of talents as well to allow them to support in form of external experts, either in form of a sourcing arrangement with a major supplier or in form of senior freelancers (whose might once again best be managed by a preferred supplier or a service integrator). Thus it is vital to have a global sourcing of IT talents and also the need to let those talents work at their preferred (home) location.
Picture 1: Benefitting from elite IT talent requires building on the global pool of experts
Successfully deploying a global pool of IT talent requires an efficient management and alignment of the teams, which is possible with modern tools for requirements management, communication and collaboration as well as automated governance. In the end the effective management of a global delivery set up will be the key to success. Innovative Cloud based tools like the pliXos Outsourcing Director do exactly that, not to mention that the provision of innovative tools plus a start up like environment is a motivator for the sought after bright and innovative IT experts to work for a specific company.
Picture 2: Generic concept of a centralized SaaS tool for efficient governance in a global delivery model, example ADM
Topic 3: Sourcing arrangements to scale the workforce rapidly
McKinsey states that „Sourcing arrangements to scale the workforce rapidly. In addition to recruiting, incumbents have to be able to scale up the workforce to deliver rapidly against unpredictable demand. This usually requires changes to vendor contracts to provide options for additional development capacity without lengthy bidding processes, and agreements with select niche vendors that can provide more specialized skills.“ The best way to ensure this is to implement proper sourcing arrangements with existing preferred providers (e.g. contracts but also tools to manage the teams) and in addition easy and fast access to new suppliers, e.g. for niche skills (e.g. by building on the existing global B2B Marketplace for SW projects).
Picture 3: Scalable sourcing of global IT talent by providers listed in the pliXos B2B Marketplace
Topic 4: Agile development and rapid releases
McKinsey states “Delivering high-quality end products quickly requires new ways of working, including agile development, rapid release cycles, automated testing and deployment, and a “test and learn” approach to changes”. Combining an agile development process (according SCRUM) with the efficient management of a global delivery model is successfully implemented since 2011, e.g. as described in the white paper “Governance of agile SW projects” of pliXos and customer Loyalty Partner Solutions. Interested readers get further insights into the agile offshore development by the presentation “Governance of agile Software projects by an automated KPI Cockpit in the Cloud” presented at the Swiss IT Sourcing Forum in 2012.
Some of the key benefits when implementing an automated Key Performance Indicator (KPI) cockpit for the governance of the agile offshore project were
- Automated data collection, KPI calculation and presentation across tools
- Manpower used for interpretation of reports and action NOT data preparation
Topic 6: Scalable cloud-based infrastructure
McKinsey states “Rapid time to market and scaling to meet increased consumer demand requires lean infrastructure operations and an elastic, cloud-based infrastructure.” Our understanding is that the McKinsey authors talks about the underlying IT infrastructure for the services. In addition we want to emphasize the similar need for the proper tools allowing for “Sourcing arrangements to scale the workforce rapidly” plus “Agile development and rapid releases” as mentioned before.
McKinsey also states corporate should “Combine a start-up mind-set with enterprise accountability”. We love that statement since pliXos is a start-up with innovative SaaS tools supporting the aforementioned task but founded by IT and sourcing experts coming from the corporate world. pliXos offers corporate the start-up view but understands the corporate world and its peculiarities.
McKinsey explains in an example that “At one European company, for example, the absence of careful governance and a single, accountable CIO resulted in 4 critical projects that spanned both new and legacy IT functions becoming uncoordinated and incurring delays” and conclude “Finally, although the high-speed function brings a start-up mind-set, it requires solid enterprise governance with appropriate checks and balances around demand management, architecture, and release management“.
We just want to mention that solid enterprise governance by ensuring speed in sourcing arrangements etc. is a core competence of pliXos. Whether it is the management of one SW development project by an automated Key Performance Indicator (KPI) cockpit (like a cockpit for piloting one airplane) or the automated governance of complex sourcing programs with multiple individual projects (like the monitoring of the whole airspace as is done by the air traffic control. Check us out!
Picture 4: Automated KPI cockpit for global SW projects
Picture 5: Automation in program management – managing multiple SW projects
So lean back, enjoy the flight and leave the governance on our tools and – if you want it in form of managed services – on our experts.
Picture 6: Trusted information as a key to safety – in flights as well as SW projects
If you want to learn more and find out how the free B2B Marketplace, the other pliXos SaaS tools or our sourcing advisory expertise can help your company digitize your IT sourcing or have comments, please contact us directly at This email address is being protected from spambots. You need JavaScript enabled to view it. or at This email address is being protected from spambots. You need JavaScript enabled to view it..
