Session 37 at the Nearshore Executive Alliance Board Meeting. Innovation in Outsourcing & Reserach by HfS Research Ltd

1. …yet, to date, organizations have received
modest results from outsourcing initiatives…
Source: HfS Research and the London School of Economics Outsourcing Unit, 2011
Sample: 347 Buyers of Outsourcing Services

2. Governance exhibits rarely drive innovation….
Governance exhibits are often little more
than management committees,
escalation procedures, and meeting
schedules.
“My contracts’ governance exhibits are the lynchpin of the
subset of governance processes that evolve services to match
our strategic objectives.” (N=56)
40% 38%
30% 29%
23%
20%
10% 7%
4%
0%
Strongly Agree Agree Neutral Disagree Strongly
Disagree

3. …and contract incentives cannot drive innovation,
either.
Contract incentives rarely sufficient to drive
evolution or innovation:
»Most focus on transaction efficiency goals
»Few allow for automatic changes to increase
established goals
“My contracts’ economic incentives are sufficient to drive an
evolution of services to match our strategic objectives.” (N=48)
40%
35%
30%
25%
21%
20%
13%
10%
6%
0%
Strongly Agree Agree Neutral Disagree Strongly
Disagree
Source: HfS Research, 2011

4. Buyers say they want innovation, but they really want
to drive efficiency and cost reduction…
Source: HfS Research and the London School of Economics Outsourcing Unit, 2011
Sample: 347 Buyers of Outsourcing Services

5. Organizations need to establish an
environment that promotes innovation.
Common, Open Business
Shift in Value Shift in Pricing
Plan
Willingness to Evaluate New Forum to Discuss Strategic Commitment to Making
Technology and Processes Direction Decisions
Timing Dedication of Resources Willingness to Take Risks