Innovation in Client-Provider Relationships
by: Sarah Joson
Wednesday, September 19, 2012
Category: Outsourcing News
With the recent conclusion of ISG’s Sourcing Industry Conference, Director Cynthia Batty shares at Info.ISG-One.com the resounding concern of clients, specifically innovation for their businesses.
Providers present at the conference responded on the issue, reiterating that in order for them to come up with feasible, innovative ideas, clients have to work with them. Parties should be able to identify who’s responsible for what, which is why vague clauses in contracts regarding innovation can only fuel more confusion.
There are several instances wherein providers think that their ideas are ignored because the clients do not trust them fully, or the clients think that they are not capable of creating innovative technology, processes, etc. The providers noted that they are demotivated, they don’t even believe in the term “gainshare”. However, both parties should be on the same page and be driven to create something new, as innovations could be crucial to the growth of a client’s business and beneficial for the providers as well.
Here are some of the ways services relationships can work through the topic of innovation:
1) Prepare a detailed definition of innovation. First off, both parties should understand which areas of the operation are susceptible to innovation and which can be long-term or short-term goals. In this way, clients will not focus on the costs and other factors that could cause delay.
2) Consider other departments of the business. Innovation can either cover a specific area of a business, or the business as a whole. Creating an innovative plan that will affect all aspects of the business brings more value to the business.
3) Explain to clients why they shouldn’t skimp on funds. Costs are usually the main concern of clients, and there will be times when the materials needed should be paid outright. Explain to the clients why they need to pay, or what the additional technology is for.
4) Innovation and improvement are two different things. Different levels of authority in businesses may regard innovation differently. For business owners, they would probably want new processes or technology, but for the managers, they might expect innovation that can improve business operations. Providers need to analyze what their clients want and deliver innovation without disrupting other functions.
5) Try multisourcing. The client can use multiple providers, each focusing on certain functions of the business. Of course, the client will act as the central hub that will direct all processes, overseeing if each department is getting the appropriate attention.