Outsourcing Competencies Key Initiative Overview



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Outsourcing that provides business value requires competence in 10 key areas. This overview provides CIOs and IT leaders with a high-level guide to help them identify, develop and deploy those competencies to get more from outsourcing and to manage their IT service provider relationships.


Figure 1. Outsourcing Competencies Key Initiative Overview
Research image courtesy of Gartner, Inc.

Source: Gartner (April 2014)

The Outsourcing Competencies Key Initiative deals with the provisioning and blending of business and IT services from a mix of internal and external providers, also known as disciplined multisourcing.

Successful outsourcing involves crafting a business-aligned sourcing strategy, developing and mastering 10 key multisourcing competencies, and establishing a solid sourcing management framework. That foundation allows CIOs and IT leaders to optimize both services and cost, and to ensure the best business outcomes. However, only 11% of respondents to Gartner's 2014 key metrics survey say that they have mastered their approach to sourcing, and 89% need to improve competencies and significantly raise their maturity levels in order to manage multisourcing successfully. Spending on external and internal IT services is higher than ever. More organizations are dealing with fragmented profit and loss reporting structures and budgeting cycles, and are using multiple vendors of different types across the enterprise. CIOs and IT leaders must invest in increasing multisourcing competencies to achieve business benefits throughout the sourcing cycle.

Consider These Factors to Determine Your Readiness

What Outsourcing Competencies Mean to CIOs

A disciplined and competent approach to outsourcing includes developing a solid sourcing strategy, management framework and the 10 key multisourcing competencies. CIOs must consider the following:

  • Aligning sourcing objectives. Align business, sourcing, and IT strategies and goals.

  • Investing in maturity. Invest time, money and resources to develop key competencies to the minimum level of maturity required to deliver on the sourcing strategy.

  • Mapping competencies to roles. Map multisourcing competencies to (and across) team roles to ensure responsibility, accountability and execution.

  • Aligning the sourcing organization and management framework. Set up teams, rules, relationships and collaboration structures to ensure the sourcing environment remains aligned with changing business requirements.

  • Ensuring ongoing improvement. Hone skills, monitor performance and continuously improve sourcing processes and governance.

What Outsourcing Competencies Mean to IT Leaders

IT leaders involved in sourcing strategy development, integration into the organization's sourcing management framework, and enhancing the organization's own multisourcing competencies should consider the following:

  • Sourcing strategy. Develop a business-driven IT services sourcing strategy that considers business demand, opportunities, risks and technology shifts on the supply side.

  • Sourcing management. Invest time and resources in the ongoing management — particularly demand, supply, performance and risk management — of outsourcing relationships.

  • Delivery and integration of services. Service and program management competencies enable the consistent, high-quality and integrated delivery of services.

  • Connecting the right people. Increase relationship and HR management competencies to address personnel resources; that is, numbers, skills, timing and team-based synergies.

  • Measuring and adjusting performance and contracts. Grow performance and contract management competencies to help enforce and ensure contract results.

Conduct Your Outsourcing Competencies Initiative Using This Structured Approach

Gartner recommends that CIOs and IT leaders follow these four organizing principles to start developing and maturing their multisourcing competencies. A high level of competence will ensure that business and IT services are properly sourced and that business outcomes are delivered.

  • Strategize and Plan: Develop a comprehensive business-oriented sourcing strategy, including scenarios, plans and directives. Assess the maturity levels of the 10 multisourcing competencies. Plan to achieve optimal levels of competence based on the IT services sourcing strategy.

  • Develop Governance: Build a sustainable sourcing management framework that ensures long-term business outcomes. Establish critical decision-making processes, rights, accountabilities and roles, as well as enforcement and feedback mechanisms.

  • Execute: Build a strong foundation by executing the 10 multisourcing competencies. Implement processes, SLAs (internal and external) and a performance structure. Make updates based on disruptive trends and/or changing business requirements.

  • Measure and Improve: Recognize that measuring the SLAs and performance metrics is critical for the ongoing execution and enforcement of processes. Use lessons learned from measurements to plan and execute for continuous improvement.

© 2014 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartners research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

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