Why Innovation Fails in Outsourcing

Innovation can be described as development or creation of a product, process, or service, to improve efficiency, effectiveness, or competitive advantage. In most IT operations, incremental improvements, increasing the value of a process or function in small steps, is driven through an implementation of the ITIL process for continual service improvement. I often write an innovation schedule in my outsourcing agreements, so why doesn’t it work?

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The aim of the schedules that I add in the outsourcing agreement is to create the culture and opportunity for architectural innovation – taking lessons learned, skills or technology used in other sectors an applying them in your environment.

If successful the concept can be extended to disruptive innovation – employing emerging technology in a new way. This schedule should, therefore, set up a safe space to share knowledge, experience, and the results of horizon scanning to collaboratively drive transformative improvement across all parties.

innovation funnel
The innovation funnel

Sadly, all too often I have seen this become little more than a series of workshops where the customer’s architectural teams shoot down the supplier’s ideas.

Almost like sport they will pooh-pooh ideas as they are not yet fully formed with a supporting business case. As can be seen in the funnel diagram above, ideas need to be shared collaboratively and nurtured to move from the abstract to firm deliverables. Some will be dropped on the way, discounted due to cost, complexity, technical constraint, or non-strategic fit.

Believe it or not, supplier staff or as human as we are and if we shoot down their ideas enough times then they will stop coming to th eforum or just sit quietly. We need to breathe life back into the old adage that there is no such thing as a bad idea, albeit some may never make it to delivery.

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