In case you missed it, there's been another scintillating debate on the "I" topic. If you have a few minutes, we suggest you visit the recent piece entitled "Busting the innovation myth" submitted to us by a top cabernet-infused advisor choosing to remain anonymous (for obvious reasons...).
A couple of insightful and accurate views worth highlighting were contributed by Equaterra's enigmatic COO Mark Robinson (pictured innovating) and CSC's President of the United States of global sales and marketing, Peter Allen:
In 'mainstream' outsourcing, innovation is often external to the process (i.e. it does not take place within the bounds of the contracted services, but rather as an add-in contracted on a case-by-case basis, either by the incumbent provider of base services, or by other service providers. There are many reasons for this, but they boil down to three primary factors:
(i) Contract terms and obligations that are 'fit for purpose' for managing day-to-day service delivery act to suppress innovation;
(ii) The people engaged in the delivery of base services are not innovators (or, if they are, then they are probably not providing world-class base services); and
(iii) Clients find it hard to take the risks (and share the rewards) needed to spark innovation with a service provider that they are engaged with in managing the daily grind of commodity services.
However, there is innovation in outsourcing in two major areas. First, service providers are innovating in the design and delivery mechanisms for their service offerings, although this innovation occurs outside of client accounts and is most readily available to new clients (or to existing clients at major inflexion points, such as renewals). Second, there is an entire class of services known collectively as Knowledge Process Outsourcing where innovation is endemic to the services.
A toxic term, Innovation.
To most Providers, they are suspicious whenever that terms is used. Too often it is interpreted as "Client wants something for free."
To most Clients, but not all, what it really means is, "Please give me proposals for ways to improve."
A sourcing relationship can be a pathway for innovation only if the parties create an environment to nurture that outcome. Nurturing includes shared investments and shared risks/rewards. Else, it's just one element on the checklist of "what don't you like?"
In the new economy ... innovation is a derivative benefit of a relationship that starts with solid delivery on core commitments.