3 ways innovative outsourcing can boost your business performance

When it comes to outsourcing innovation, companies reap what they sow. That’s the advice given in Aecus’ Innovation Reality Report 2015, which outlines three distinct ways in which purchasers can boost their business performance by innovating their outsourcing agreements...
3 ways innovative outsourcing can boost your business performance

Innovation. It seems to be all anyone is talking about at the moment. Businesses are constantly jumping on new technologies and fresh ways of working to bring more value to their companies, whether through better relationships or building revenue.

Typically, relationships between outsourcing buyers and suppliers can be challenging. But this is changing, and innovation is the happy culprit.

The latest Aecus Innovation Reality Report 2015 explores the innovative strategies UK businesses in particular are taking for their outsourcing agreements.

Outwardly there seems to be this belief that outsourcing partnerships are prone to inertia, but in reality this seems to be far from the truth.

Based on the responses of 100 senior outsourcing buyers, the report outlines three key ways in which innovation in this area is pushing purchasing forward. And the results speak for themselves.

Purchasers that are actively innovating their outsourcing practices say they are reaping the benefits. Fifty-four percent say they have achieved customer satisfaction in their wider business via outsourcing partnerships. Alongside this, 45 percent suggested that their innovative ways of working have had a positive effect on revenue growth.

Paul Morrison, Head of Outsourcing Innovation at Aecus said: “For outsourcing buyers, innovation is becoming an increasingly important consideration, and this will continue [to] gather momentum as the tangible benefits to businesses become ever clearer."

“At its root, innovation is the result of creating and executing a well-designed process, and consistently nurturing this over time. It is a reassuring sign that organisations understand how accessible these changes really are."

The rise of analytics

While the use of analytics in outsourcing strategies is already fairly widespread there is still a lot of room for growth.

Eighty percent of those surveyed by Aecus said they wanted to implement digitisation in their outsourced operations, but only a third had actually used it in their current partnership.

To gain more value from their analytics, companies need to direct much more attention to data.

As technology moves forward so more and more businesses are able to look at their past behaviour and make predictions on future outcomes. Analytics should be the engine room of business.

In one of our recent articles, Rob Scharff, purchasing & logistics manager of Stolt Tankers said that for his company, data is king. “Data is everything,” Rob commented. “To share data is key. Data sharing is based on trust. Partnership relations are not built over night."

Overall the benefits of analytics are big. Analytics can improve customer satisfaction, product development and risk management.

For outsourcing buyers, developing an orchestrated analytics sourcing strategy should be prioritised as it can involve many different parts of an organisation from purchasing, to operations, marketing and beyond.

The rise of the robotics

We’re not talking about Terminator here, then again have you seen those exo-skeletons they’re using in shipyards now? If that’s not Ripley I don’t know what is. Or how about those firefighting robots that the US Navy is testing?

When we talk about robotics in regards to outsourcing innovation we’re talking about the use of smart software to replicate process work that was once completed by humans. And robotic solutions are not the same as other automation types for a number of reasons. Robotic solutions are generally quick to implement, mirror human processing and reduce the need for costly systems integration.

According to Aecus’s report 32 percent of organisations have already implemented robotics in their outsourced operations, and this is a trend that is likely to rise rapidly over the next three years and into the future. It also has an incredible amount of potential to change the way outsourcing and, of course, the wider business world works.

The rise of multi-channel engagement

You’ve probably already heard, it’s hardly news, but multi-channel engagement is quite trendy at the moment. And that’s a trend that’s echoed in the outsourcing world. Forty-seven percent of those surveyed by Aecus said that they have already implemented multi-channel engagement in their outsourced operations. Another 33 percent want to do this within the next 12 months.

Multi-channel engagement is all about connecting with stakeholders in the best way possible; whether it be via phone, email, internet, or web chat. And outsourcing providers are becoming a integral part of the multi-channel landscape.

Paul Morrison, partner at Aecus explained: “As technology advances and the tools for communication become ever broader, multi-channel engagement has become an important buzzword."

Investing in multi-channel engagement can have big outcomes on business as the old measures of success become obsolete. People need to think bigger. To be successful it needs to be broad (when considering channels) but at the same time coherent. Outsourcing buyers need to understand how to work with their suppliers on this new level. Companies may need to rethink the way they do work and do so with the customer in mind.

Buyers who are looking to use multi-channel engagement to innovate their outsourcing will need to review their relationships and in particular their service agreements and consider renegotiating terms.

Overall, businesses are making progress when it comes to their outsourcing innovation, but there are still problems to be overcome. Organisations face several key challenges, which could block the path to innovation. For one, companies can tend to lack the formalised strategies to ensure regular and consistent innovation results. For example, companies can lack the knowledge in their business to manage suppliers for innovation. In fact 31 percent of those surveyed said this exact thing. Additionally a business’s contractual agreements with its outsourcers may not be set up for innovation.

Morrison said, “Despite the progress there are still hurdles to overcome to ensure organisations achieve the bet results. To maximise the impact innovation can have on a business, it is absolutely vital to invest in the right capabilities, and implement the right framework of suppliers, incentives and governance. You reap what you sow in outsourcing innovation.” 


by Laura Stackhouse

readmt.com Editor

Laura Stackhouse is the Web Editor of readmt.com, an official publication of the International Marine Purchasing Association (IMPA). To discuss news, features or contributing to readmt.com please get in touch.

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