Innovation in Outsourcing


Outsourcing has evolved in terms of adoption of tools and taking the outsourcing relationships to the next level. Since outsourcing involves two parties, the scope for innovation lies in the development of new tools that would help the outsourcing partners deliver faster and quality services to the client and adoption of strategies to give the existing processes a makeover for the better. Very clearly, without innovation there can be no possible growth. Enterprises often complain that innovation calls for funding and would drastically impact their IT spend. As a result of this, many outsourcing partners have failed to integrate certain critical components in their service level agreements. The key is to base innovation on the kind of stakeholders one has in the business. Both the parties involved in an outsourcing relationship must innovate keeping in mind the capabilities of the other party.

The thought of innovation must be based on the sourcing relationship. If the responsibilities of the processes lie with the service provider or the outsourcing firm, then the kind of innovation an enterprise wants to do must be clearly discussed because it will influence the business in the end. Another very important aspect is the client should be adaptive and open to incorporate the change in his process. For example- if an outsourcing agency adopts an innovating communications and service delivery mechanism, the client should also be willing to make some changes to accommodate the innovation. If this does not happen then the entire purpose of innovation goes for a toss. In a business ecosystem, a small change has the power to affect the different stakeholders and therefore, everybody should be prepared to accept it in the established set up. To implement innovation in outsourcing relationships, it is important to first define the vendor governance model right into the contract and set up parameters for defining the success of the innovation. The outsourcing industry in India has witnessed much of these issues because western enterprises have increasingly chosen to outsource to India.

Innovation is all about business intelligence and in the world of IT; one of the most proven ways to achieve it is to clearly identify issues that creep into vendor management. Some of the most compelling hindrances hint towards lack of change management, ineffective governance, and back dated resources. With a complete holistic approach, the thought leaders have identified certain best ways to amalgamate innovation seamlessly in the outsourcing and some of these are:

  • Take time to draft an effective RFP that will set the enterprise expectations right in the market.

  • Define the innovation that you are expecting from your outsourcing partner.

  • Connect increasingly to different outsourcing agencies to understand the level of innovation that is available in the market and the extent to which you are ready to make changes in your own set-up. It is important that you start learning to treat the outsourcing agencies as more of consultants, knowing and learning from them.

  • Place all the stakeholders in the business in the similar shoes. It is when different stake holders respond to a similar situation with their thoughts, an enterprise can truly define the kind of innovation that they need.

So whether an enterprise plans to outsource to India or for that matter any other destination, these salient points if adhered to, will lead to a well-informed business decision.


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