It takes two to innovate

date: 19 June 2011
reading time: 2 min

Recently the National Outsourcing Association conducted some research into innovation in outsourcing.  What surprised me about the results is the fact that while customer and outsourcers are both interested in innovation - 70% of respondents consider innovation to be very important - only the outsourcer seems to be

Recently the National Outsourcing Association conducted some research into innovation in outsourcing. What surprised me about the results is the fact that while customer and outsourcers are both interested in innovation – 70% of respondents consider innovation to be very important – only the outsourcer seems to be willing to actually commit to it. Innovation can be a funny thing. We all agree it is important but because the benefits of innovation are usually not measured, and sometimes not even attributed to it, I feel it is often undervalued. Take for example one of our customers. They are an insurance company who wanted to use offshore software development for a particular project and chose us. We worked closely and openly with them, keeping their team abreast of what we were doing. When it came to the QA testing they were very impressed with our process, in particular with the speed of it.

To cut a long story short, they ended up replacing their in-house QA process with the one we used and it has cut their testing times by half, reducing time to market for the company’s products. This, I believe is an important innovation for them. If they knew they were going to get that result, I am sure they would have committed more time and budget in the outsourcing relationship to innovation. Unfortunately you can’t always tell what innovations you will end up with and how valued they will be to the business. But, you can put in place processes and frameworks to foster innovation in the outsourcing partnership.

For example:  appointing innovation leaders from both sides of the outsourcing relationship, ensuring innovation is a KPI, or making sure it is part of the agenda for regular review meetings. However for these to work they do require commitment from both the outsourcer and the client. As the example of our customer shows, innovation can come from all sorts of places and can have very tangible effects on your business. Surely that is worth some additional resource and budget and some of your attention.  I certainly think so.

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