IT Sourcing Sorcerer

Sourcing Success: The Three Fates Every IT Leader Must Master

Enjoy the listen. 🎧👂

🔮 Are your sourcing strategies guided by fate—or by design?
Drawing inspiration from Shakespeare and centuries-old wisdom, our podcast, Sourcing’s Three Fates, explores the three critical forces that shape every sourcing relationship:

TINA (There Is No Alternative)

SAM (Sourcing Account Management)

DAE (Dollars Are Everything).

Whether you’re a CIO, procurement leader, or business strategist, understanding these “fates” is essential for driving value, managing risk, and achieving sustainable savings.

Key Takeaways:

• TINA: Every organization sources—make sure your agreements are clear and aligned with business needs
• SAM: Relationship management is dual-sided; governance and adaptability are vital for success
• DAE: If the dollars don’t add up, the deal is doomed. Financial rigor is non-negotiable.

💡 Pro Tip: Don’t let your sourcing journey become a tale of “double, double, toil and trouble.” Clarity on TINA, SAM, and DAE is your roadmap to success.

Outsourcing can unlock efficiency and cost savings—but italso hides two costly evils:

🔍 Paying for Nothing🔍 Paying Twice for Something

From inflated SLAs to duplicate software licenses, these traps quietly drain budgets and erode value. In his guide Outsourcing’s Two Evils, Ernie Zibert shares practical strategies to avoid them:

✔ Audit your agreements—cancel overlapping maintenance and warranties.
✔ Right-size SLAs—don’t pay for 99.99% uptime if 99.9% meets business needs.
✔ Avoid prepaying for services—negotiate discounts based on actual spend.
✔ Clean up billable objects—unused AD accounts and SaaS seats inflate costs.
✔ Align backup strategies with business risk—ditch redundant layers.

The moral? Clarity and vigilance will save thousands if not millions. Enjoy the listen.

Why “Lowest Cost” Outsourcing Could Be Your Biggest Risk

When it comes to outsourcing, chasing the lowest price often feels like a win—until reality hits. According to Ernie Zibert’s Sourcing Value Compass, the five dimensions of sourcing value—Financial Benefit, Market Discipline, Flexibility, Specialization, and Customer Satisfaction—are deeply interconnected.

Here’s the kicker:

• Lowest cost ≠ best deal. It often comes bundled with poor performance and rigidity.

• The relationship between price and satisfaction follows a U-curve: too cheap or too expensive, and satisfaction plummets.

• Push suppliers too hard on price, and you invite the “sourcing nightmare”—scope creep, reduced service quality, and hidden costs.

Pro tip:
Focus on Finance vs. Market Discipline first. Make sure price reflects performance. If your business is transforming fast, invest in Flexibility—it’s your insurance against future constraints.

💡 Want to dive deeper? Check out Ernie Zibert’s insights on sourcing strategy and governance.

🚀 Why P5 Pricing is the Future of IT Managed Services

For over two decades, IT pricing has been dominated by P x Q models—Price × Quantity. While functional, these models fail to align IT costs with actual business demand. Enter P5: Price per Period per Person—a game-changer for transparency and scalability in IT services.

When most managers order IT services, they assume they’ll “get what they paid for.”

Reality check: You always get CHIPS with that order. And no, not the crunchy kind!

CHIPS =

✔ C – Customer involvement

✔ H – Heterogeneity of service quality

✔ I – Intangibility

✔ P – Perishability

✔ S – Simultaneity

These five characteristics make IT services fundamentally different from IT products.

👉 You can’t stockpile services.

👉 Quality varies.

👉 Value depends on active involvement.

Rethinking Cloud Value Assessment

This podcast challenges outdated IT cost‑comparison models and introduces a modern framework for evaluating cloud investments. Traditional “generation one” metrics—comparing on‑premises costs to cloud pricing—fail to capture agility, scalability, and flexibility. Instead, businesses should benchmark service‑to‑service across cloud providers, ensuring true apples‑to‑apples comparisons.

Bottom line: Stop asking for the “price of a mousetrap.” Focus on comparative cloud services, agility, and strategic sourcing to maximize value.

This podcast identifies the ten things every CxO should do to slash cloud waste.

2025 marks the first-year cloud spend exceeds traditional IT, with cloud revenue forecast around $917B versus $868B for traditional tech (Gartner). This trend only accelerates into trillion-dollar territory by 2028.

If you need one number to mobilize the board: assume 40% of your cloud spend is wasted.

This podcast discusses the IT tendering processes and critiques traditional Request for Proposal (RFP) methods. The metaphor “RFP cow is too fat” suggests that the conventional RFP/RFx process has become bloated, inefficient, and overly complex. Organizations invest too much time and effort upfront in procurement, even though this phase contributes only a small fraction, less than 10%, of overall value. The podcast shows that most value in IT outsourcing is lost after the contract is signed, not during the tendering phase. So, focusing excessively on RFP details is misguided. Instead, it recommends leaner, smarter approaches. Enjoy the listen.

This podcast outlines the five essential governance processes for successful IT outsourcing relationships.

These processes are designed to improve sourcing outcomes and are compliant with ISO 9001:2015 standards.

Enjoy the listen.

Today, we’re diving into Ernie Zibert’s thought-provoking ebook, “The Death of Managed Services.” It’s a bold title, but Ernie makes a compelling case for why the traditional IT Managed Services Provider—or MSP—model is rapidly becoming obsolete.

Enjoy the listen.