Outsourcing innovation - myth or a matter of time?

The debate over whether innovation in outsourcing can truly exist seems interminable. At the same time as commentators debate about what innovation really is, suppliers continue to jostle for a place at the innovation table, the opportunity to say “We add value” rather than “We are cheap”.

Out of all this, it’s clear that no one has yet truly found the answer. Some believe that the fact that outsourcing is too tightly bound by a commercial contract stifles any potential for innovation within the project. Others believe that the heavy involvement of the procurement department, with its principle focus on cost and little regard for quality or service transformation, is also an inhibitor to innovative outsourcing.

If the outsourcing project is “locked down” from a commercial standpoint and too strictly governed by service level agreements and key performance indicators, neither the supplier nor the end user organisation will feel incentivised to identify opportunities for innovation. This ensures that any scope for innovation is scuppered.

So what actually drives innovation? And what environmental variables have to be present for innovation to flourish? Partnership and trust between the end user organisation and their partner is paramount. So is the ethos of approaching a problem and solving it together, as opposed to doing it in isolation. End user organisations are starting to realise that to really see the benefits of outsourcing, they need to work with their partners on high-level projects where the innovation and business transformation will make a positive effect on bottom line.