Innovation is often hailed as the ultimate solution in outsourcing. This is particularly true today, as organisations look to the future with ambitions for growth. But what do people really mean when they talk of innovation in outsourcing? How can it be delivered? And is there a way to quantify innovation and measure its impact? At its simplest, innovation is defined as introducing something new or different.
But as the decision to outsource itself is about change for the better, attempting to pinpoint the role of innovation can be a challenge. In reality, expectations can range from business as usual or continuous improvement programmes, to whole-scale transformation.
The first key to success is to create a joint understanding of exactly what innovation is and isn’t. Ultimately, innovation needs to be based on a clearly identified need. A good idea can be subjective, but a good idea with a purpose can make a real difference. Is the primary objective one of generating new revenue opportunities, uncovering the next new thing, or capitalising on changing market dynamics? The common denominator is the end result – not just transformation that adds value to a client, but change that benefits their customers. For example, the introduction of a new portal accessible via mobile devices may reduce customer service costs, but it could also revolutionise customer experience and increase loyalty, ultimately resulting in revenue growth.
For innovation to form a foundation for transformation it should be supported, rather than driven, by technology. Unlocking the potential in an organisation can be delivered through a range of developments; change in the process itself, implementation of new techniques, or new approaches to sharing information. Imagine the positive impact of a change that enables online retailers to deliver parcels to busy professionals in the evenings, without having to pass on additional cost to the customer. Cost will undoubtedly remain a key driver for outsourcing, but for smart organisations, it’s increasingly about change for the long term and enabling growth. These innovators want to transform their organisation for the better – to increase competitive advantage through greater speed and flexibility or improve quality of service to their customers. So how can we ensure innovation thrives?
A collaborative culture creates an environment where people listen, all ideas are considered and discussed, and fresh-thinking becomes the norm. Employees, who may have worked in an organisation for years, doing the same thing the same way, can suddenly come up with revolutionary ideas to truly transform outcomes. Equally, an outsourcing partner that has established a deep understanding of an organisation, its ambitions, strengths and weaknesses will be able to provide another point of view that may uncover potential opportunities for growth.
Risk aversion and a fear of the unknown can block transformation, but a partnership based on trust, long-term commitment and shared risk-reward creates more of a willingness to explore change. A collaborative governance model provides a level of comfort and control, helps turn ideas into action, and provides a mechanism to track and evaluate success. Measuring innovation ultimately depends on the motivation driving the change. From the outset, it’s vitally important to agree on precisely what success looks like. For some, this is about regular communication, measurement and reporting, but for others it can come down to something as simple as gut feeling.
While innovation isn’t a magic bullet, the behaviour and endeavour it represents can often be the missing piece in successful outsourcing relationships. Make no mistake, transformational innovation isn’t for everyone. But, a clear rationale and definition, combined with a partnership based on trust, can turn innovators into leaders.