How to Harness the Value of Outsourcing-led Innovation

Submitted by Innovation Management on Tue, 04/05/2011 - 2:46pm

Companies who are engaged in developing innovation processes are also likely to be involved in outsourcing significant aspects of their operations. So how do you innovate when you’ve also outsourced?

In this age of globalisation, outsourcing has become an integral part of the way large, multinational enterprises are managed. From helping to provide application support, processing claims, managing networks, billing systems or even customer service, the majority of large businesses are spending more on outsourcing now than at any point in the last few years. Research from Gartner shows that 53% of European organisations in 2010 were planning to outsource more with 40% due to increase their external IT services spending.

Innovation is increasingly becoming a vital element of outsourcers’ offering, and businesses are relying ever more heavily on their outsourcers to deliver  innovation capabilities.

Innovation is increasingly becoming a vital element of outsourcers’ offering, and businesses are relying ever more heavily on their outsourcers to deliver  innovation capabilities. Research we recently conducted with Warwick Business School among 250 CIOs and CFOs across six regions (the UK, Germany, Switzerland, Benelux, France and the Nordics), reveals just how important this innovation is: 70% of European C-level executives believe the innovation achieved through outsourcing contributes to their organisations’ financial performance. But, worryingly, the research suggests that businesses are not getting most of outsourcers’ innovation capabilities. If only 35% are actually quantifying the financial value that innovation adds to their business, how can they prove its worth and make the case for future investment?

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This post has been shared with the PDMA community by The Conference on Social Product Development & Co-Creation partner, InnovationManagement

Comments

by Darrell Young - 11/19/2011 - 8:22pm

Each association has a dream

Each association has a dream to find the magic bullet that enhance creativity, increase productivity, and boost morale. Surprisingly, some of the best solution is counter-intuitive and run against conventional wisdom.

by criss john - 11/19/2011 - 7:19pm

Innovation is the creation of

Innovation is the creation of products more efficiently or more effectively, process, technology, or ideas that are accepted by the market, government, and society. Innovation is different from the invention or renovation of a large positive change of additional changes is simple.

by james smith - 11/18/2011 - 7:40pm

As companies navigate the

As companies navigate the reset economy, they invest wisely in the process to be profitable and beneficial in the long term. Since both outsourcing and customers can attest, modern outsourcing relationships now offer and deliver much, much more than cost savings. They can transform society to achieve greater efficiency and productivity by helping a company to maintain competitive advantage.