Abstract
As we signaled in Chap. 1, there is a trend for outsourcing relationships to become increasingly managed and leveraged as strategic assets, with clients looking for business ideas, innovation and environmental scanning from their suppliers and a much greater focus on business, not just technical outcomes. The indicators of this can be found in research by, for example, Cullen (2009), Lacity et al. (2009) and Lacity and Willcocks (2009):
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More rigorous planning and measurement of outsourcing relationships
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More contracting based on values, behavior and client demand
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Suppliers becoming more entrenched in their client’s business—including supporting the client’s mainline services
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Suppliers becoming a client of the client and identifying new sales opportunities
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Notes
- 1.
Our definition of collaboration is consistent with strategy literature, but not with earlier outsourcing literature. See also Kern, T., and Willcocks, L.P. (2000). The Relationship Advantage: Information Technologies, Sourcing and Management. Oxford University Press, London.
- 2.
The definition was developed by Intel’s IT Innovation Group for in-house use. See Westerman, G., and Curley, M. (2008). “Building IT-Enabled Capabilities at Intel”. MIS Quarterly Executive, 7 (1): 33–48.
- 3.
Weeks, M.R., and Feeny, D., 2008, ibid., pp. 127–146.
- 4.
Examples include EDS-Xerox, IBM-Lend Lease, BAE-CSC and UBS-Perot Systems.
- 5.
See also Cramm, S. (2007). “Does Outsourcing Destroy IT Innovation?”. HBR Blog Network, available at http://blogs.hbr.org/hbr/cramm/2010/07/does-outsourcing-destroy-it-in.html 2010.
- 6.
Mckeown, M., op. cit., 2008.
- 7.
Information Technology Infrastructure Library, a set of concepts and practices for IT services management.
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Appendix: Research Methodology
Appendix: Research Methodology
We studied 26 organizations between 2008 and 2011. These organizations were selected because of their considerable outsourcing experience and sourcing management maturity. They covered a range of major industry sectors and were drawn from medium, large and multinational corporations based in Europe, the US and Asia-Pacific. As shown in the table, five were achieving only IT operational innovations through new forms of collaboration. The other 21 were involved in deep collaboration that was delivering IT operational and business process innovation. Eight of these were also delivering strategic innovations.
Organization | Sector | Revenue, 2010 ($US) | Employees, 2010 | No. of deals | Type of ITO/BPO innovation | Interviewees |
|---|---|---|---|---|---|---|
KPN | Telecoms | $11b | 34,000 | 4 | O, P, S | Director of Innovation, IT Manager, Supplier Relationship Executive |
Telco 1 | Telecoms | $25b | 43,000 | 5 | O, P, S | CIO, Transformation Director, Supplier Executive, CFO |
Telco 2 | Telecoms | $65b | 85,000 | 2 | O, P, S | CIO, IT Relationship Manager, Supplier IT Executive |
Telco 3 | Telecoms | $6b | 13,000 | 2 | O, P | CIO, IT Operations Manager, Supplier Account Executive, Service Delivery Manager |
Aero | Defense and aerospace | $31b | 107,000 | 2 | O, P | HR Director, IT Executive, Supplier Account Executive |
Bank 1 | Banking | $19b | 44,000 | 3 | O, P, S | CIO, Service Delivery Manager, Supplier Operations Manager, Supplier Executive |
Bank 2 | Banking | $9.5b | 38,000 | 4 | O, P | CIO, IT Strategy Manager, Supplier Business Development Manager |
Insure 1 | Insurance | $44b | 28,000 | 4 | O, P | BPO Relationship Manager, Senior Contract Manager, Supplier Executive |
Insure 2 | Insurance | $9b | 18,000 | 3 | O | IT Development Manager, IT Operations Manager, two Supplier Executives |
Insure 3 | General insurance (market) | $5.4b (profit) | 2500+ | 2 | OP | CIO, IT Development Manager, Supplier Account Executive, Supplier Service Manager |
StatoilHydro | Oil and energy | $85b | 28,000 | 2 | O, P, S | IT Senior Executive, Head of Service Delivery, IT Development Manager |
Energy 1 | Energy utility | $620m | 2000+ | 2 | O | IT Director, IT Operations Manager, Supplier Executive |
Energy 2 | Energy exploration | $15m operating loss | 100+ | 1 | O, P | IT Manager, Innovation Manager, Supplier Account Executive |
Energy 3 | Energy utility | $58b | 88,000 | 3 | O, P | IT Manager, General Manager, Supplier Operations Executive |
Manu | Manufacturing | $10b | 109,000 | 5 | O | IT Director, Development Manager, two Supplier Executives |
Distrib | Car components distribution | $650m | 1100 | 2 | O, P, S | IT Manager, Operations Manager, Supplier Executive |
Leisure | Gambling and leisure | $2.1b | 5000+ | 1 | O, P, S | IT Development Manager, IT Developer, Supplier Executive |
Spring Global Mail | Postal services | $5.4b | 11,000 | 4 | O, P, S | IT Director, IT Operations Manager, Supplier Executive |
Mail 1 | Postal services | $4.8b | 35,500 | 4 | O, P | CIO, IT Architecture Manager, Supplier Executive, Supplier Operations Manager |
Water 1 | Water utility | $660m | 1000+ | 1 | O | IT Director, IT Operations Manager, Supplier Executive |
Water 2 | Water utility | $850m | 1300+ | 2 | O, P | CIO, IT Operations Manager, Supplier Executive |
Public | Public sector financial | $14.4b (total resources) | 1500+ | 1 | O | Sourcing Director, Relationship Manager, Supplier Executive, CIO Supplier |
Aviation | Airport authority | $3.7b | 13,000 | 2 | O, P | CIO, Project Director, two Supplier Executives |
Health | Private sector healthcare | $1.2b | 19,000 | 2 | O, P | CIO, Operations Manager, Supplier Executive |
Retail 1 | Consumer electronics | $49b | 180,000 | 1 | O, P | IT Manager, HR Manager, Supplier Executive |
Retail 2 | General food consumer | $16b | 101,000 | 2 | O, P | CIO, IT Operations Manager, Supplier Executive |
For each organization, we interviewed at least three client and supplier stakeholders, all highly experienced outsourcing practitioners, about outsourcing models, possibilities and their actual practices. Follow-up interviews were carried out in late 2010 and early 2011 to gather the latest information on innovation outcomes. In total, we carried out 86 interviews and studied numerous supporting documents supplied by the participating organizations.
Analyzing the experiences of these 26 organizations enabled us to identify common themes, practices and principles, which we have distilled into the collaborative innovation process framework depicted in Fig. 2.2.
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Willcocks, L.P., Whitley, E.A. (2018). Outsourcing Reframed: Delivering on Collaborative Innovation. In: Willcocks, L., Oshri, I., Kotlarsky, J. (eds) Dynamic Innovation in Outsourcing. Technology, Work and Globalization. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-75352-2_2
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