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Seeking Creativity in Outsourcing Deals

by: Ronald Escanlar

Wednesday, January 19, 2011 |

Outsourcing service providers may be able to deliver on time, work within reasonable rates, and maintain open, communicative, and flexible relationships, yet these positive factors may be insufficient to keep clients satisfied and willing to extend outsourcing agreements.

Seeking innovation in outsourcing deals

According to leading outsourcing consultancy firm Alsbridge, Inc., clients look for innovation from their service providers in the form of “fresh ideas which would have a radical impact on either the delivery of service and/or the client’s general business performance.”

Innovation will lead to cutting-edge skills and services, and with that advantage, the value of the outsourcing relationship increases. Both the outsourcing service provider and the client-company benefit from the new techniques, new knowledge, and new insights gained from the outsourcing deal. The client-provider relationship thus goes beyond cost savings - creativity adds another vital dimension to value-added services.

Although Alsbridge explains that many outsourcing deals are more focused on cost reduction, client-companies can seek innovation from their service providers by simply requiring it at the onset of outsourcing negotiations. If a client-company is seeking for a specific transfer of knowledge, skills, or technologies, the request should be clearly stipulated and documented in the service level agreement. At the same time, if the inputs are clearly outlined, the expected outputs should also be as clearly indicated, too, as possible.

After documenting the required “innovation”, the client-company and the preferred outsourcing service provider must work together to enable the process of innovation, to ensure that the necessary inputs are met, and that expected outputs are documented and delivered.

Creativity can be “required” from the service provider, as long as “innovations” are included in the contract and both parties work together to produce those “innovations”.

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