Procurement 2.0 wave can mitigate supply chain risks

AS PRESIDENT, Asia-Pacific of Tata Consultancy Services (TCS) for over a decade just after the dot-com bust in 2000, I would often meet harassed chief technology and chief information officers (CTO/CIO) struggling with large-scale Internet adoption. And as mobility became mainstream, the ubiquity of 24/7 computing created additional technology challenges for enterprises. Meanwhile, the first regional Sars virus pandemic in 2003 shuttered key Asian countries, creating further risks in 24/7 operations.

Enterprises desperately needed to transform to compete in a newly emerging tech-savvy consumer landscape replete with mobile phones. To survive, they overhauled their obsolete technology to cloud-enabled systems. This move created new risks around cybersecurity, data protection (and of late, sustainability). Meanwhile the innovative tech industry and the global startup ecosystem were luring away tech talent in droves from corporate tech departments. Retaining or attracting tech talents became a major headache for CIOs and CTOs.

The response to all these changes was substantial outsourcing of IT services and purchases of cloud-native standard tech products (compared with the earlier stance of developing bespoke solutions in-house with large groups of tech developers). Tech product vendors and outsourcers meanwhile consolidated and grew to global scale, and offshoring to low-cost but tech-talent-heavy countries such as India and the Philippines became mainstream. Major Indian systems integrators such as TCS and Infosys, along with traditional players such as IBM and Accenture managed this wave of outsourcing well. CIOs carefully outsourced non-core functions to tech vendors – who by now had become more capable and cost-effective with process discipline and scale.