Sourcing Management

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An important point is made about how strategy was absent from early e-business attempts. The first part of this book described how strategy might be present. To establish and maintain a distinctive strategic positioning, an organization needs to follow six fundamental principles concerned with right goal, value proposition, value configuration, trade-off, fit, and continuity (Porter, 2001). One of the strategic choices often overlooked is concerned with IT sourcing. IT sourcing decisions are influenced by trade-off, fit, and continuity principles. IT sourcing is related to the previously discussed topics in various important ways. First, the resource-based theory influences the choice of sourcing options, as sourcing is dependent on the availability of IT resources from internal and external sources. Second, e-business has specific requirements for IT infrastructure services depending on e-business models, and these requirements will typically be met through sourcing of IT services. Furthermore, decisions concerning IT sourcing belong in the strategic IS/IT planning process at the middle stages of the Y model. Finally, while e-business represents an answer to the question “what” the organization wants to do, sourcing represents an answer to the question “how” the organization can do it. More and more companies move into IT sourcing combinations that require proactive management, leading to an increased need for IT governance. This is the topic of the third and final part of this book.