Embrace, Transform and Reinvent
Snow Software was a Premier sponsor at the Gartner IT Sourcing, Procurement, Vendor & Asset Management Summit, held in London on 26 – 28 September. This year, for the first time, Gartner combined two separate events to bring five disciplines together: Sourcing and Vendor Management and IT Financial, Procurement, and Asset Management. It’s interesting to see that Gartner has observed a shift in business such that these disciplines can no longer exist in silos.
The theme of the event was to “Embrace velocity and innovate to influence and impact business performance.” The keynote, delivered by Bill Ryan and Joanne Spencer, both Gartner Research Directors, stated that traditional sourcing, procurement, vendor, finance and asset management disciplines have become antiquated as market forces drive the transition to digital business. CEOs are in a race to achieve digital at scale, with 63% saying they are likely to change their business model within the next three years. To achieve this, leaders must collaborate with each other to evolve and mature the skills and competencies necessary to influence stakeholder adoption of key technologies and solutions, to enable growth while protecting the bottom line.
Gartner suggested three changes necessary to accelerate the transition to digital business:
Embrace
We need to recognize and embrace the digital change happening all around us and recognize that existing models (such as licensing) do not work for this new digital reality. Gartner predicts that there will be 25 billion connected endpoints by 2021, a three-fold rise on where we are today, and the challenge is to defend against technology companies who want to apply a twentieth century device-based model to 21st century IoT use cases. Companies must update their IT Asset Management strategies to manage IoT devices, APIs and Artificial Intelligence, and by doing so be prepared to handle a lot of new vendors.
Transform
In a recent Gartner survey, 62% of CFOs would choose supporting speed and agility over cost control. To achieve digital transformation, businesses should embrace risk and spend more on small bets that are quick to implement and achieve return on investment, with less spend on the larger, long-term ventures. They should create a two-tier vendor model – one for mega-vendors and a second, much faster, riskier, more agile model for small vendors. Companies need to create new processes to track usage using different metrics, as SAP did recently when it announced a new licensing measurement based on document creation for indirect/digital access.
Reinvent
Gartner’s third point was that we need to transform our processes to keep up with the changing business landscape. IT is being bypassed when making purchases with 38% of IT spend being outside the formal IT organization. In a recent survey, Gartner found that 20% of a typical marketing budget was spent on technology, but when CMOs were asked if they were effective at acquiring and managing technology, 50% felt they needed assistance. IT needs to move away from their cookie-cutter, one size fits all approach and move to a model that supports different needs at different times from different groups within the business; providing advice and facilitating self-service on lower risk technology purchases through to consultancy and management of the higher risk acquisitions. When it comes to IT Asset Management, IT needs to adapt its strategy from one to just manage technology assets that they’ve purchased and own, to one that can track and manage services they rent or consume.
The Snow presentation, “Suddenly Everyone’s an IT Decision Maker, Now What?”, enforced the Gartner message, focusing on the role IT had to play as a Technology Guardian to support their company as digital business grows.
My take away from the event was that business is changing rapidly and IT must be agile and adapt quickly to new challenges. In this changing market, keeping track of IT technology assets and managing usage, whether in the cloud or on-premise is getting more and more complex. Add to that the ever-increasing risks of security breaches and enhanced data privacy regulations and the task becomes immense.
To find out how Snow help you manage your technology assets in this changing business landscape, contact us …