Dynamic Innovation In Outsourcing

This book is a guide for achieving innovation through outsourcing. Unpacking the various challenges faced by client firms and suppliers, the authors take the reader through the innovation lifecycle and devise a clear plan to achieve valuable results. Offering practical frameworks and tools to ensure informed decision-making at every stage, this book also includes collaborative structures and metrics to measure outcomes. Written by leading figures in the area of outsourcing, this book offers both the academic rigor and the hands-on experience based on dozens of cases that walk the reader from the very beginning of the outsourcing journey to the successful delivery of transformative innovations.

The number of companies that outsource critical business processes to outside suppliers has been growing significantly worldwide. In 2012, companies outsourced some $309 billion of services - activities including finance and accounting, human resource management, procurement and legal services - and the overall volume has been growing at a rate of around 25% annually. Although many organizations initiated business process outsourcing (BPO) as part of an effort to reduce costs or acquire new skills, it has since evolved into much more. Today, senior managers want more than shortterm cost savings, and they are skeptical of big-bang improvements. In relationships companies classify as high performing, the authors found that service providers perform ongoing innovation projects that deliver substantial long-term improvements to the client's operating efficiency, business process effectiveness and strategic performance. These types of innovations require companies and service providers to work together. BPO providers do not need incentives to improve their own revenue or margins, but they do need them to focus on the client's performance. The authors found that both clients and providers identified several important measures, including mandatory productivity targets, innovation days and gain sharing at the project level, as the most effective incentives. Other approaches involved making sure that providers know that they don't have a lock on the business and introducing special governance provisions, such as committees dedicated specifically to innovation. While partners may incentivize innovation by using mechanisms such as productivity targets, allocating innovation days and agreeing to gain share on innovation projects, the authors argue that innovation won't happen unless clients and providers implement a more comprehensive process that combines acculturation across different organizations, an engaging method for generating ideas, adequate funding and a system for managing change. Perhaps the most significant factor in BPO innovation, however, was whether the right people were in place to drive the dynamic innovation process. The authors found that an effective leadership pair - one person from the client organization and another person from the provider organization - went a long way toward invigorating the innovation process. In the high-performing BPO relationships the authors looked at, the leaders were experienced and capable, with high le ...

This book collects and reports on the results of a study conducted on the Chinese Software and Services Outsourcing (SSO) industry, focusing on one of its main players as a key case study. Two sets of research findings are presented: first, the knowledge management and communication processes inherent within a highly collaborative software development project between the case study company and one of its long-term UK clients are explored and distilled into specific practices; second, at the organizational level, the strategies used by the company to build and exploit capabilities and to dynamically configure resources to promote specific value positions along its outsourced services value networks are identified and discussed. The significance of these findings for similar China-based global high-tech firms and the value of this organizational form in moving closer to the goals of the 2020 enterprise vision are both discussed, along with the implications of the findings for EU/UK businesses operating in similar digital domains.

This new volume in the "Advances in Management Information Systems" series presents the latest cutting-edge knowledge in IT outsourcing. As part of the growing business trend to outsourcing various operations, IT outsourcing both determines the governance of a vital organizational function and influences the processes of exploitation and exploration in all other functions of an enterprise. In keeping with the mission of the "AMIS" series, the editors of this volume have framed the domain of research and practice broadly. "Information Technology Outsourcing" provides leading edge research on both the variety of decisions regarding the outsourcing of IS services and the management of the relationship with service suppliers.

Innovative ruptures of traditional boundaries in value chains are requiring companies to rethink how they go to market, what they need to own, what they need to retain and innovate as core competencies, and how they innovatively deal with suppliers and customers. The key message of the book is that the new knowledge-networked innovation economy requires a totally different strategic management mindset, approach and toolbox, and its major value-added is a new strategic management approach and toolbox for the innovation economy - a poised strategy approach. Designed for both managers and advanced business students, the book provides a unique combination of new management theory, selected managerial articles by prominent scholars such as Clayton Christensen, Henry Chesbrough, Sumantra Ghoshal, Quinn Mills, and Peter Senge, and a wide array of real-world case examples including GE, Shell, IBM, HP, BRL Hardy, P&G, Southwest Airlines and McGraw-Hill, within the dynamics of industries such as airlines, energy, telecommunications, wine & beverages, and computing. The authors illustrate powerful new strategic innovation concepts and tools, such as poised strategy for managing multiple business models, poised strategy scorecards (moving beyond the well-known balanced scorecard), the wheel of business model reinvention, and organizational rejuvenation methods. The book includes the concepts of: Poised Strategic Management, Organizational Rejuvenation, Business Models as Platform for Strategy, Poised Scorecards, Identifying Sources of Innovation in Business Ecosystems.

This paper constructs a dynamic North-South trade model with outsourcing and endogenous innovation. Production of high quality goods is first performed in the North (Northern phase), then split between the North and the South (Outsourcing phase), and finally shifted to the South (Southern phase). This cycle is reignited whenever a Northern firm innovates a higher quality product. We find that an increase in the fraction of outsourced production raises the Northern skill premium unambiguously, while raising the Southern skill premium if and only if the skill intensity of outsourced production is higher than that of local Southern production.

Decision-making on outsourcing new product development (especially innovation projects), such as engaging and managing the supply chain, is far from easy. It may involve addressing strategic and operational risks that might cause longer development times and increase innovations costs. It is, therefore, imperative to select suppliers very carefully and set up an effective management strategy vis-à-vis the supply partners right from the inception phase. Supply chain management is facing enormous challenges, driven by interrelated disruptions that will have a vast and lasting impact. Based on a relevant case study, Boeing 787 Dreamliner programme, this volume offers a comprehensive overview of the decision-making models for outsourcing strategic activities. The proposed model suggests a valuable approach to outsourcing the decision-making strategies for new product development when the innovation is driven by technological innovation.

For decades, outsourcing has been a major international phenomenon in business. The areas of Technology, Information Technology and Management represent a unique case for outsourcing both in terms of benefits and potential interorganisational problems. This fully updated text has been brought up to date with this new landscape, including discussion of Robotic Process Automation, Internet of Things, cloud computing, low code and DevOps and agile. With a range of new global case studies in manufacturing, logistics, chemical industry and cloud services, this textbook offers a strong grounding in real-world industrial experience that effectively combines theory with practice. Uniquely, this book focuses on both sides of the outsourcing relationship, providing a balanced exploration of the ways in which these partnerships can be managed successfully. Accessible and cutting-edge, the third edition of Managing Information Technology Outsourcing provides an in-depth, practical perspective on this important and far-reaching challenge in information technology management. It is an ideal text for students, academics and practitioners alike.

How do firms compete? How do firms earn above normal returns? What's needed to sustain superior performance long term? An increasingly powerful answer to these fundamental questions of business strategy lies in the concept of dynamic capabilities. These are the skills, processes, routines, organizational structures, and disciplines that enable firms to build, employ, and orchestrate intangible assets relevant to satisfying customer needs, and which cannot be readily replicated by competitors. Enterprises with strong dynamic capabilities are intensely entrepreneurial. They not only adapt to business ecosystems; they also shape them through innovation, collaboration, learning, and involvement. David Teece was the pioneer of the dynamic capabilities perspective. It is grounded in 25 years of his research, teaching, and consultancy. His ideas have been influential in business strategy, management, and economics, and are relevant to innovation, technology management, and competition policy. Through his consultancy and advisory work he has also brought these ideas to bear in business and policy making around the world. This book is the clearest and most succinct statement of the core ideas of dynamic capabilities. Teece explains their genesis, application, and how they offer an alternative approach to much conventional strategic thinking grounded in simplistic and outdated understandings of industrial organizations and the foundations of competitive advantage. Accessibly written and presented, it will be an invaluable and stimulating tool for all those who want to understand this important contribution to strategic thinking, be they MBA students, academics, managers, or consultants.