The Search for Innovation in Shared Services and Outsourcing
Mark Trepanier, Managing Director, Human Resources Practice
I tuned in today for an interesting discussion from Horses for Sources on the search for innovation in shared services and outsourcing. The dialogue reinforced that the first step is a clear definition of innovation: Is innovation about efficiency or an improved service experience? Is it input-focused or output-focused? Whether you are shared services or in an outsourcing relationship, it is important that you define that in the relationship. And experience shows that “real” innovation will be valued in the service experience most, so consider that carefully. It is all about the customer, after all.
A surprising (to me) statistic noted is that approximately 55% of customers were satisfied with the level of innovation from their shared services organization or outsourcing provider (if I interpreted the chart correctly). That is well above the levels of satisfaction I have seen in most relationships – either way, getting to innovation continues to be a challenge. Even 55% satisfaction is not a great indicator of success.
And finally, recognize that suppliers innovate to drive revenue up or costs down. So, as the customer, remember to think about what is in it for the supplier (a theme Phil and Esteban from HfS emphasized). If your relationship is mature enough – ask. And if you are not sure if it is, engaging in this conversation would be a great way to drive your relationship up the maturity curve.
For more on innovation, read these blogs by my EquaTerra colleague in Europe, Lee Ayling: Create a Habitat where Innovation Will Thrive and Innovation Insights.
Could agree with you more on all accounts. Might add that it requires appropriate observation to discern between innovation and process improvement. The incentive has to be there, in the contract, to encourage innovation to take place (and to be viewed as innovation and not simple process improvement recommendations).