Two weeks ago, I was reading articles about AI for sourcing to bring some ideas to a client. I stopped reading this article (https://futureofsourcing.com/harnessing-the-power-of-sourcing-business-models) that shacked my mind. This lovely and succesful theory is so poor applied in the Data & AI services.
When a company seeks a strategic supplier of services for Data&AI, the crucial first step is to choose the right sourcing model, which will make or break the relationship. Unfortunately, many organizations are not operating with sourcing strategies for Data&AI services: they are anchored in buying strategies developed more than 30 years ago. They still use the RFP shop model or low price staff augmentation, purchasing Data&AI services like commodities.
A strategic sourcing for Data&AI services can leverage new powerful business models like well known Walmart’s Every day Low Price which has been so successful for years. Every Day Low Price had a key concept, Agile Supply Chain. Walmart understood the competition was and is, no longer between companies, it´s between supply chains.
Strategic sourcing for Data&AI services should be moved from the sourcing concept of “BUY” to “MAKE”. Move from a transactional provider model to a vested and shared business model (see the book Strategic Sourcing in the New Economy: Harnessing the Potential of Sourcing Business Models for Modern Procurement). Models where the buyer and supplier have an economic interest in each other´s success. The supplier can perform the best to achieve transformational or innovation objectives. Buyers and supplier enter into highly collaborative, win-win arrangements designed to create value above and beyond the conventional buy-sell.
By Edward Canney
CEO & Founder of iGerencia.