Sourcing in the digital age - shaped by disruption

This article first appeared in the July 2018 issue of PLC Magazine.

Nick Pantlin, Jeremy Purton, Alex Cravero and Claire Wiseman of Herbert Smith Freehills LLP discuss how new disruptive technologies are shaping current sourcing strategies.

Many people believe that we are currently witnessing a fourth industrial or technological revolution, with the advent and increasing use of a wave of disruptive technology. Over the past fi ve years, the market has seen the arrival of a range of new technologies that have transformed the sourcing market and delivery models for both IT and business process service offerings. These include: multitenanted platform provision, such as cloudbased services; robotic process automation (RPA); machine learning; artifi cial intelligence (AI); the internet of things; blockchain and distributed ledger technology (DLT); and smart contracts.

Increasingly, organisations are having to think like technology companies as they look to explore and assess the opportunities, as well as the commercial and legal risks, presented by these technologies and alternative delivery
models.

As a result, conversations around technologydriven transformation and sourcing strategies are now board-level agenda items. These conversations are closely aligned with two other critical executive concerns: data protection and data use following the recent entry into force on 25 May 2018 of the General Data Protection Regulation (679/2016/EU); and cyber security risk with the entry into force on 10 May 2018 of the Network and Information Security Directive (2016/1148/EU) (NIS Directive) (also known as the Cybersecurity Directive).

This article considers:

• The challenges and opportunities presented by new technologies from a sourcing perspective.
• The key trends and drivers behind recent changes to sourcing models.
• How businesses engaged in sourcing (both customers and suppliers) could deploy more effective sourcing strategies to keep abreast of technological change as disruption continues to be a key feature of the digital economy.

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