By 2025, up to 75 percent of an organization’s workforce will come from what sociologists call Generation Y. Sourcing executives need to start now to plan for changes coming from the Generation Y who has different habits and requirements when it comes to technology and services, as well as their way of working.
In my latest research note entitled “Generation Y Will Reinvent Outsourcing” I reported that Generation Y has a higher appetite to look externally when seeking a new IT solution. To leverage those solutions, they are willing to take some risks and to give some trust to the quality of an externally provided service such as the cloud. This can impose risk to the organization; risks that have to be balanced with end-user desire together with real business benefits such as speed and flexibility. Understanding this new balance between demand and business risks/benefits is, more than ever, paramount to the success of sourcing organizations. Sourcing organizations have to get insights from Generation Y and include them in their governance models.
Generation Y is also changing old paradigms. It turns the make versus buy trend around by 180 degrees – it looks first into what is available on the market before deciding to build anything, especially with highly commoditized services. Today’s sourcing executives have to prepare a strategic approach that allows that shift to happen seamlessly and with optimized risk.
Sourcing managers and contract managers should understand that Generation Y values different things and has a higher degree of trust toward what external sources can deliver. While the demand for low-cost and high-quality services is not any different from today’s purchasing attributes, the demand for speed is much higher with today’s impatient Generation Y workers, and customer experience is joining the list of key purchasing attributes. This requires new evaluation criteria and a new set of information to collect during request for proposal phases. This also increases the importance of the “try before you buy” purchasing approach.
I do not expect Generation Y impacts will come overnight, and organizations have up to 12 years before 75 percent of their workforce will come from this generation. However, it is crucial for organizations to understand their own impact timeline so that they can prepare, plan and start implementing initiatives early enough.
I will discuss this topic in more detail and where outsourcing meets the Nexus of Forces at the Gartner CIO & IT Executive Summit 2013, taking place from June 17-18, in Frankfurt, Germany. For more information on the Summit please visit http://www.gartner.com/technology/summits/emea/cio-executive/. Information from the Summit will be shared on Twitter at http://twitter.com/Gartner_inc using #GartnerCIO.