Building Innovation into Outsourcing Relationship - Case Study Example

 Building Innovation into Outsourcing Relationship Before introducing innovation in any process, system, and operation, AlphaCorp must understand the need for the innovation. In its sourcing services, innovation must be regarded as the process of initiating new processes in systems or operations that they never existed with the sole aim of improving the functionality and productivity of such systems and processes, but at reduced costs. In applying this understanding, AlphaCorp must determine areas of their operations that require innovations. Innovation will only be necessary when where current systems, processes, and operations seem to be non-productive regardless of the effort applied in them (In Hirschheim et al., 2014). Therefore, after identifying the innovation process to be implemented, AlphaCorp must understand how the innovation will be incorporated into the intended operation and or processes (Babin & Schuster, 2012). In other words, it is only through understanding the scope of the innovation that costs and services required to initiate and implement such innovations can be determined and analyzed. AlphaCorp and B&B must distinguish between innovation and continuous improvement in the projects they are running or intend to run towards improving their productivity (Babin & Schuster, 2012). They must ever consider or regard all projects or programs that they have never been working on and are intended to be initiated into their systems as a mean of improving their service deliveries and operations as innovative programs or projective. However, there are some programs and projects that have been operational within the system, but they need to be adjusted on for better results (In Hirschheim et al., 2014). The systematic progress on processes that are already existing programs and projects is known as continuous improvement. Notably, well intended and drafted projects and programs must give room or ways through which continuous improvement will be conducted on them. Finally, AlphaCorp and B&B must know that innovation must always be carried on already existing productions but not new productions or areas (Babin & Schuster, 2012). In some cases, innovations often fail and if such failures are experienced in new production or areas, it will be highly challenging restore the destroyed image of the product or of the company in the new areas it failed due to failed innovation. In other words, when company’s innovative measure failed among its regular customers, there are chances to recover and not fail completely since the company had already had loyal customers who may simply understand and pick up on it (Babin & Nicholson, 2012). The major problems in LatinAmericawas that it had poor service levels that affected performance of the company in the region. The services of B&B in this region never satisfied the customers. AlphaCorp performed below B&B expectation in this region. Obviously, innovation in this region would definitely improve the company’s performance in the region (In Hirschheim et al., 2014). The region had already had the services of the company, but such services were only being offered not to the satisfaction of the customers; therefore, if AlphaCorp would deduce another way of conducting its business in the area in a more satisfying manner to the customer, the business’s performance in the areas will definitely improve (Babin & Schuster, 2012). The innovation in this area would not in any way affect the current relationship since it only through innovation that the business operations of B&B through AlphaCorp’s outsourcing services will improve. Notably, introducing new products by the company in this area will not be effective in attracting customers since they will still view the product in terms of the company’s failed previous product and services (Babin & Nicholson, 2012). Hence, improving relation relationship between customers and the company through proper innovation is the only way to improve the relationship between B&B and AlphaCorp. Outsourcing is usually a proper means of improving services and cutting operation costs of the outsourcing company, only if the contracted outsourcing service provider delivers the intended services in accordance with the expectation of the client and intended costs. However, poorly outsourced services may as well lead to the collapse of the outsourcing company; thus, the client company must use proper and effective outsourcing arrangements (In Hirschheim et al., 2014). For instance, use of a single model across all outsourcing arrangement may be dangerous for the outsourcing company since different outsourced services are not intended for same service provision in the company. In case where sourcing and outsourced companies agree to work together, the ownership of the intellectual property must be handled properly since one of the companies may pertinent the same group idea or property for its own gain (Babin & Nicholson, 2012). Hence, if such intellectual properties are well handled, all the involved parties will gain or use the property as per the agreement without short-changing any of the contributors. Notably, every company should discourage outsourcing for innovation and CI services since it is only the mother company that understands its products and programs laid in rolling such programs with the CI towards improving its productivity; hence, profitability (Babin & Nicholson, 2012). The most effective outsourcing model is the collaborative model. This model is perfect since it involves both buyer and provider in delivery services hence increasing the relationship between the two entities thereby reducing risks of failures in delivery. Use of technology is also good since it reduces expenses when well applied (In Hirschheim et al., 2014). The B&B must work with AlphaCorp to enhance its success in the intended outsourced services. Moreover, working together will increased the relationship between the two entities thereby improving in understanding and ironing challenges facing the business. The role of B&B would be to provide leadership and monitoring & evaluation towards determining the sources of error that lead to poor service delivery among other failures of the company (Babin & Schuster, 2012). References Babin, R. & Schuster. (2012). Building innovation into the outsourcing relationship: a case study. Journal of information technology teaching case (2), Pg. 98 – 103 Babin, R. P., & Nicholson, B. (2012). Sustainable global outsourcing: Achieving social and environmental responsibility in global IT and business process outsourcing. Houndsmills, Basingstoke, Hampshire: Palgrave Macmillan. In Hirschheim, R. A., In Heinzl, A., & In Dibbern, J. (2014). Information systems outsourcing: Towards sustainable business value. Read More