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Challenging the Status Quo: Dynamic Sourcing’s Best and Worst

By Andrew Johnson | May 22, 2023 | 0 Comments

Information TechnologyCollaboration and End-User Technologies for Technical ProfessionalsCSP Digital Transformation and InnovationDigital Workplace Infrastructure and OperationsInfrastructure and Operations LeadersSourcing, Procurement and Vendor Management Leaders

The dynamic (agile) sourcing process, although highly effective for some, may not be the right fit for every organization. It requires a certain level of maturity in procurement and IT discipline to manage it effectively without additional resources or consulting support. The rapid and intensive nature of the dynamic sourcing process might seem overwhelming to those accustomed to a slower pace. approach offers to those who are ready to embrace its transformative power.

Imagine a scenario where an organization needs to secure a complex managed service and solution deal. Using the traditional RFI/RFP process, it could take months to complete the negotiation and agreement. Now, consider the dynamic sourcing process: a sprint-style methodology that allows organizations to navigate and finalize such deals in just 90 days or less. This streamlined approach not only saves time but also enables significant cost savings on contract renewals and proposed cost reductions.

An example of the dynamic sourcing process in action is a company seeking a new IT service provider for their digital infrastructure. Within 90 days, they shortlist three to five global providers and engage in a competitive dialogue with each. This process fosters innovation and collaboration, resulting in tailored solutions that meet their specific needs.

An alternate example illustrates how dynamic sourcing didn’t work as planned. A global company wanted to move their meeting room solutions from a CapEx to an OpEx model. They needed additional finance and legal people in the decision team. These new people were more interested in detailed T&C’s than procurement speed and derailed the fast buying cycle.

Dynamic sourcing process may not be suitable for all organizations, or for all buying journeys. Best case, it offers a shortened procurement cycle, cost savings, and opportunities for co-creation with service providers. Just be conscious of how all the people in the buying process appreciate the sprint.

The Gartner Blog Network provides an opportunity for Gartner analysts to test ideas and move research forward. Because the content posted by Gartner analysts on this site does not undergo our standard editorial review, all comments or opinions expressed hereunder are those of the individual contributors and do not represent the views of Gartner, Inc. or its management.

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