Strategically Organising for Innovation in Global Sourcing

Abstract

Over the past decade, delivering professional services from offshore locations in low factor-cost countries has emerged as a strong and convincing element of the service portfolio offered by multinational providers and firms of Indian origin alike. Many client companies have achieved substantial cost savings through offshoring and by industrialising their IT development and maintenance. The question is: what comes next? Where do the next improvements and savings come from? Bottom-up innovation in offshore delivery factories can be incentivised, controlled and the results used to implement delivery improvements leading to additional cost savings or new business for the client. Managing this offshore IT innovation process is, however, not the sole responsibility of the offshore service provider. It also contains a cultural aspect and requires the involvement of and commitment by the client corporation, which needs to develop and establish processes and metrics around incentivising and managing bottom-up innovation from their offshore delivery team.