Strategic Sourcing of the Application Portfolio

How CIOs bring focus to their sourcing policy

Fueled by business changes and changes in IT, application portfolios have become increasingly heterogeneous. A growing demand from the business and a decrease of supply in the IT labor market pose new challenges to the CIO. Now that external sourcing options for application services are maturing, a growing number of organizations take a more structured approach to application sourcing. Boldly outsourcing the entire application services portfolio; or ad-hoc solutions like hiring more external contractors, seldom provide a sustainable and satisfactory solution. Contrary to infrastructure, application portfolios tend to benefit from a more differentiated sourcing approach. It is time for the CIO to make strategic choices regarding the application portfolio and bring focus to the sourcing policy.

CIO, an innovator?

With new technologies redefining the way we do business, one might expect
the CIO and the IT function to play a leading role in business innovation.
However, our survey results indicate that they are not.
Moreover, the future role of the IT function is under threat. An
Economist Intelligence Unit report2showed that over a third of CIOs
agree with the statement that within five years standalone IT departments
will have ceased to exist. One of the reasons for this is that a new
generation of IT-literate business staff and managers is now able to
exploit new technologies and market services to innovate without the help
of in-house IT professionals.