Outsourcing lacks ambition, all about cost

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Outsourcing lacks ambition, all about cost

A London School of Economics professor has urged executives to put ‘a level of ambition’ back in outsourcing to achieve innovative outcomes over and above a low-cost benefit.

Speaking to iTnews, the head of the information systems and innovation group in the Department of Management at the London School of Economics, Leslie Willcocks, said he will interview five Aussie firms, predominately energy and water utility customers of Logica, as part of a global study around collaborative innovation in outsourcing.

Willcocks said the issue was predominately the result of a lack of relationship building between senior management and the outsourcing supplier and the fact that perhaps less than one in five organisations viewed outsourcing as a key part of their business strategies.

“Outsourcing is seen as a back office commodity rather than as something that could help transform the business,” said Willcocks.

“Let’s put a level of ambition into outsourcing. That means selecting a certain level of supplier and also bringing the business into it by involving senior management more.”

He added for senior management, “You can’t distance yourself from outsourcing arrangements. What we’re proposing here is an involvement change.”

Organisations that find a way to leverage the relationships they have with their outsourcers can achieve innovative outcomes for the business. It's akin to uncovering the ‘holy grail’ of outsourcing, according to Willcocks.

"Very few organisations have worked out what to do to leverage their outsourcer relationships," he said.

“For the last eight years, the big question everyone has about outsourcing is where is the added business value?”

The study itself is not limited to customers of Logica. Most customers being interviewed typically had ‘a number’ of different outsourcing arrangements in place, Willcocks said.

The results are expected next year.
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