National Outsourcing Innovation Day June 2010
Innovation means different things to different people. Some see it as problem solving, others associate it with the latest gadgets, and some even see it as getting the cheapest option. But, what is certain it that relationships are fundamental to innovation.
Innovation is climbing up the outsourcing agenda and the Innovation End User Forum identified a number of behaviours exhibited by end user organisations that enjoy some success with innovation. These behaviours or ‘Key Indicators for Innovation’ are either strategic or operational and are exhibited by different parts of the client-side or service provider organisations.
During the event, Lee Ayling, the NOA Innovation Director presented a draft framework showing the Key Indicators for Innovation. The framework is to be developed over the coming months through stakeholder feedback and NOA commissioned research. Ayling chaired the NOA’s recent Innovation Day, which involved contributions from a number of NOA steering committees helping shape the programme for the day. Our thanks go to all the sponsors who supported the event: Alexander Mann Solutions, IBM, Siemens, and Pinsent Mason for hosting the event.
Trusting relationship: the fuel for innovation
Innovation ranks high on the list of requirements for end-users that currently outsource or are looking to outsource their IT and business processes. However, the concept is often fraught with complexity, misunderstanding, and confusion.
There has been much talk in outsourcing circles about the need for innovation and innovative solutions. Where it gets complicated is determining what ‘innovation’ in outsourcing actually means. Is it about the technology, devising fresh processes or approaches, or exploring new business models? One person’s innovation may be another’s standard practice.
Experts will tell you that innovation in outsourcing can be defined as the use of new ideas from supplier to client, or of existing ideas that are new to the specific client involved, so as to provide significant value to the end-user and the end-user's customers.
This means that methods for adding value or providing better service can be considered innovative, however, they must be entirely new within that particular outsourcing partnership.
Innovation: Pinning it down
From an end-user perspective, any innovative idea put forward must be specific to the user’s particular needs, as illustrated by Siemen’s MOT Computerisation project. However, in order to be effective, both supplier and end-user must also engage in a collaborative process to determine how innovation can best help them achieve their objectives. What will become their innovative methods?
“Innovation is not just technology-based; it is also processes, and approaches to problem solving. The definition of innovation is flexible - it changes and evolves. From an outsourcing point of view, the supplier and the end-user need to work through, develop and agree a working definition of innovation to make sure their objectives are achieved,” noted Tony Morgan, CIO at IBM during the National Outsourcing Association (NOA) Innovation Day which took place in June this year.
Certainly technological innovation is as much a means as an end, which is illustrated by the ways in which SaaS/Cloud computing solutions are being applied by end-users. However, whether we speak of technology or processes, innovation is useless unless it helps users achieve the desired objective(s). more efficiently.
Innovation, however, is also about process. The way in which a problem is approached – either by coming up with new ideas or effectively morphing some of the old ones to match the needs at hand can result in innovative solutions being developed and rolled out.
“Innovation can be about new things or about standardised processes. What makes innovation real is a combination of insight and pragmatism (capacity to deliver),” added Morgan.
Collaboration + trust + thinking outside the box = Innovation
This capacity to think outside the box was clearly illustrated in the Vodafone case study presented during the NOA’s Innovation Day by Marin Cerullo, director of innovation and resourcing communications at recruitment specialist Alexander Mann Solutions (AMS).
Having played on the redundancy fears that flared up in the minds of Orange employees during the negotiation of the firm’s merger with T-mobile, Vodafone and AMS devised the ‘See Red’ campaign to attract Orange staff. The campaign included clever advertising and online component, and also physically reached out to Orange staff outside their Bristol headquarters.
According to Cerullo, the ‘culture of innovation’ that’s embedded in AMS’ vision made it possible to conceive Vodafone’s ‘See Red’ campaign. Further proof of the firm’s commitment to innovation was the creation of a new position: innovation director. It also developed an innovation lab to do some ‘trend hunting’ to drive an innovative culture, sponsor new ideas and develop new products/services both for in-house use as well as for clients.
Innovation: a journey
The only secret to innovative solutions is that there is no secret. These creative solutions are more frequent in collaborative environments and partnerships built on trust, where ideas freely circulate and mistakes are inherent to the learning process.
Trust mitigates risk and risk-aversion, allowing the end-user and suppliers to approach any problem solving exercise with more confidence. ’Failures’ are not about assigning blame, but should be viewed as learning opportunities.
No project can be successfully implemented if the parties involved do not collaborate. In order to do so, communication must be two-way and it must be clear. Without this understanding the partnership will fail to build up enough trust – which is also fundamental to guarantee that the final contract will not undercut innovative efforts as Bridget Fleetwood from law firm Pinsent Masons reminded us during the event.
In other words, for innovation to take place the relationship/partnership between the supplier and end-user must progress beyond cost-cutting models. The maturity of the partnership therefore must move towards ‘collaborative innovation’, to borrow the term used by Professor Leslie Willcocks from the London School of Economics who also spoke at the event.
The old adage ‘Good fences make good neighbours’ may hold true, but in partnerships the erection of fences must be avoided as they only serve as barriers preventing a collaborative relationship.
The destruction of these barriers is a clear indication of the maturity of a relationship. A mature relationship allows for better understanding, fostering the emergence of best practices.
Innovation may be triggered by necessity, but it can only be accomplished through the collaboration of trusting relationships. Only then will the leadership be able to nourish and channel creative thinking and innovative solutions.