Business 101 tells us that a corporation’s path to profit is through prioritizing efficiency and controlling cost. Time to rethink that dictum.
Global supply chains are quickly learning that not every decision they make about sourcing, production and distribution should be determined by upfront cost — not at a time when geopolitical strife is upsetting trade patterns everywhere.
That argument was put forward by Yanni Karalis, managing vice president at Gartner, at the consultancy’s 2026 Procurement Conference in San Diego earlier this month.
Karalis said the eruption of wars and trade disputes around the world is especially forcing businesses to reshape their technology-sourcing strategies in support of procurement and other supply chain functions. “Tech access is becoming conditional,” he said. “It’s not something we were thinking about. [Now it] depends on geopolitics and national security, not just market forces.”
“Conditional” access to technology that once was easily sourced “produces new risk, affecting innovation and competitiveness,” Karalis added. And that’s forcing organizations acquiring technology to prioritize business resilience and continuity over cost efficiency.
Data sovereignty — the legislative framework and governance that pertain to data regulation, as well as the question of where in the world data must be stored and processed — is under threat. “Trust is fundamentally broken,” Karalis declared. “Who will protect your data sovereignty? The bad news is, no one will.”
All of this has companies “paralyzed by uncertainty” as they agonize over which tech providers, especially cloud services, to rely on. Once it was a best practice to work with the smallest possible number of suppliers, and that still makes sense from a financial and governance perspective. Increasingly, though, tech acquisition is becoming subject to changing government trade policies, causing traditional sourcing rules to break down.
“Assuming that global providers bypass political borders is outdated,” Karalis said. “Ownership and legal obligations now heavily impact sourcing.” And contracts with providers, no matter how detailed, are no longer sufficient to mitigate risk from export controls and other government restrictions.
Karalis identified three systemic issues currently affecting data security and supply chain tech acquisition, with proposed solutions for each:
The problem: Conditional access to U.S. technology. Barriers include export controls, licensing restrictions, sanctions and national security exceptions. They’re creating new problems that traditional vendor management alone can’t solve.
The solution: Build sourcing optionality. That means having at hand prequalified alternatives that can be readily activated when conditions change. To make that possible, businesses need to create data “portability” with easy substitution of supporting tech providers. “You cannot build this flexibility by yourself,” Karalis said. You have to be the influencer.”
The problem: Concentration and vendor lock-in risk. Excessive vendor concentration, with reliance on a small number of U.S.-based tech providers, creates structural dependencies and higher risk.
The solution: Shift to multi-vendor, multi-region ecosystems. That distributes risk across suppliers and regions, “even if it doesn’t make sense from a financial and governance perspective.” Tech acquisition today requires “architectural discipline,” deploying standardized interfaces, interoperability and workload segmentation for seamless integration.
The problem: Time, cost and operational inflation. Increased policy scrutiny is extending acquisition-approval cycles and adding compliance costs. Such hidden expense results in delays that hamper business agility.
The solution: Design for resilience over efficiency. This calls for “a shift in mindset,” Karalis said. “It comes from bigger conversations than getting a 5% discount.”
He added that organizations need to have in place “executable exit strategies,” should a shift in providers be suddenly required. “Develop tested strategies with clear contract provisions and allocated funding for quick implementation,” he said. “You need to be clear about who is going to do what.”
Bottom-line-minded chief financial officers need to be proactively advised about the necessary tradeoffs relating to risk, access and resilience. “I’m not telling you it’s easy,” Karalis told his audience of procurement professionals, “but you have a responsibility to be the commercial adviser, where you point out those concerns.”
And it’s not going to get easier anytime soon. “I promise you,” Karalis said. “There is a lot of disruption already underway, and more disruption to come.”