Outsource or innovate – can you do both?

 

CIOs outsource for a variety of reasons: better service performance, lower costs, greater efficiency and, in a few cases, to be seen as the executive making an impact. Irrespective of the rationale, most share a common expectation that their outsource partners will offer creative and innovative solutions throughout the contract. This was highlighted in a 2009 survey by Forrester Research which found that over 40% of organisations outsourcing IT services cited the lack of innovation or continuous improvement as their greatest challenge with vendors.   With most IT suppliers recognising that the development of innovative and creative solutions is critical to their success, where does the problem lie? Often it simply comes down to organisations not articulating what is expected by way of innovation from their outsourcing vendor. This can be resolved by drawing on a technique from the IT Service Management toolkit, namely the Service Improvement Plan (or SIP). The SIP can provide the basis for an innovative response provided that the requirement is well defined, the context is set correctly and there is a means of measuring success.

Defining the requirement In other words, articulate the question to which you think innovation is the answer. To provide real value, innovation must be defined in the context of business objectives – it may be transformation efforts that improve shareholder value or create a level of strategic or tactical advantage. For business stakeholders, this could result in increased sales or improved customer satisfaction. Only with that level of understanding can an innovation discussion be clarified.