Demand/Supply Organization Models Have Pros And Cons

Trade publications and consulting firms have been singing the praises of a new type of IT organization model — the demand/supply (D/S) model. D/S organizations separate IT resources that manage demand from those that supply IT services. They have the advantages of flexible sourcing, specialization, and better management of multiple services vendors but the disadvantages of reduced accountability and increased overhead. Given a sparse track record, CIOs considering this model must recognize that as with all major organizational changes, this will require significant management time and could potentially be disruptive to operations. Therefore, changing to a D/S organization should be implemented only when there is a high use of services firms, great need for variable resources, and a greater focus on managing business demand.