IT Sourcing Sorcerer

“90% of Outsourcing Deals Lose Over Half Their Value—Here’s Why”According to Ernie Zibert’s research, the problem isn’t outsourcing itself—it’s how we manage it.📊 A survey of 100+ IT professionals revealed:50% cite low customer satisfaction as the biggest issue90% believe 60% or more of expected value is lost over the lifetime of an outsourcing dealShockingly, 1 in 3 say 100% of value disappears,The takeaway? Poor governance erodes value. If you’re outsourcing, rethink your approach today. Implement strong sourcing governance frameworks and tools like the Sourcing Compass to turn things around.

What’s the real difference between a $1 Million and a $1 Billion IT sourcing deal?Surprisingly… almost nothing.Whether you’re negotiating a small agreement or a mega-deal, the fundamentals remain the same:✅ Contract clarity✅Performance accountability (SLAs)✅Transparent invoicing✅Demand management✅Relationship governanceScale adds complexity—but the playbook doesn’t change.If you’re a CIO, vCIO, VMO manager, or sourcing leader, focus on these five pillars and you’ll win—regardless of deal size. Enjoy the listen.

Are you still measuring outsourcing success by cost alone?That’s a trap many organizations fall into—and it leads to missed opportunities, unhappy customers, and stalled innovation.In my latest piece, I break down the Five Dimensions of Sourcing Value—a practical model that helps you:✔ Reduce value leakage✔ Align sourcing with strategic priorities✔ Balance trade-offs between cost, flexibility, andcustomer satisfactionKey takeaway: Outsourcing isn’t just about saving money. It’s about knowing where your Sourcing Value Compass points—and why.

Unlock the Science Behind Sourcing Governance 🚀Most organizations spend 70–80% of their IT budgets just “keeping the lights on”—and the same inefficiency plagues sourcing governance. The result? Strategic forums are often cosmetic, while operational meetings dominate. This imbalance costs businesses 15–50% of annual contract value in lost opportunities.It’s time for a shift.✅ People – Invest at least 5% of ACV in governance resources and ensure clear accountability.✅ Processes – Own the right governance processes (Contract, Issues, SLAs, Invoice, Service Requests).✅ Tools – Structure governance meetings with discipline and transparency using formulas like Fmtg = (Frequency, Type, Duration).Good governance = clarity on “who talks with whom, about what, and when.”When done right, sourcing governance moves from a rear-view mirror IT agenda to a proactive business value engine.💡 Key takeaway: Effective governance isn’t optional—it’s the foundation for safer, cheaper, faster, smarter, and greener IT decisions.

Sourcing Success: The Three Fates Every IT Leader MustMaster🔮 Are your sourcing strategies guided by fate—or by design?Drawing inspiration from Shakespeare and centuries-old wisdom, my latest piece, 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 businessstrategist, 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 needsSAM: Relationship management is dual-sided; governance and adaptability are vital for successDAE: 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 SomethingFrom 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 RiskWhen 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 deeplyinterconnected.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 ServicesFor 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 – SimultaneityThese 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 AssessmentThis 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 by Ernie Zibert, the IT Sourcing Sorcerer, 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.

This podcast shows the synergy between the evolution in our understanding of human sexual performance and IT sourcing governance. We do not have specific guidance for customers and service providers so that they can efficaciously design and deploy IT sourcing governance. Until we attain such a goal, we should treat a discourse on IT sourcing governance with the same reverence as neophytic treatments for impotence. enjoy the listen.

Today, we’re diving into a fresh approach to IT outsourcing — something called CREAMS. No, not the kind you put in your coffee, or the kind you put on your skin, but a strategy that could transform how your company manages IT Services.CREAMS stands for, 'Cloud Realised and Enabled Augmented Managed Services'.

This is a summary of the Cyber Security Principles published by the Australian Government’s Cyber Security Centre on 4 December 2024. Proudly bought to you by the IT Sourcing Sorcerer. Enjoy the listen.

This podcast provides best practices for the effective governance of your cloud service provider(s). It answers the question, ‘is there any difference between governing traditional outsourced service providers and cloud providers?’ In addition, this podcast answers the question, ‘what's the best way to govern your cloud provider relationship?’The lyrics to the Kate Bush’s song, Cloudbusting, 1985, are metaphorically used.Regarding cloud services, ‘what makes it special makes it dangerous’. But ‘don’t wake up crying ‘cause you’re making rain’. Implement the cloud governance recommendations contained in this podcast and ‘the sun will come out’.Enjoy the listen.