Is it possible outsource innovation?

Discover what it takes to ensure your business is a success in both sourcing and innovation with the book ‘SourceIT – Balancing Sourcing and Innovation in Information Systems Development’. The book is based on empirical evidence from the innovation consortium SourceIT and introduces, among other things, a number of tools that can help and inspire companies to build up, strengthen or improve their sourcing capabilities – collaboration across distances and national borders.

One case study from the book: It is possible to outsource innovation

Typically this requires an analysis of the company’s maturity and enhancements to its collaboration and processes.

Danske Bank, which is both a case study and an integrated part of the SourceIT project, has set a number of challenges relating to knowledge transfer, where knowledge and ideas were at risk of being lost across Denmark and the company due to outsourcing to India.

“Danske Bank is not divided as hierarchically as the company they outsource to in India, and if an idea comes up in development here, for instance, there is a reasonable chance that it will find its way up the hierarchy. In the Indian company, on the other hand, there is a different tradition and a longer road from development to those making the decisions. In other words, this means it is more likely that good ideas, which often come up as part of the development process, will fall by the wayside. This fact – that good ideas and innovation disappear when development is outsourced – can be an inhibiting factor in making any decision about sourcing at all,” explains project manager Jørn Johansen from DELTA.

From theory to tool

Each chapter of the book introduces a tool based on the studies and analyses carried out by the consortium. “And of course, there is no question of unknown methods. We have continued to work with results such as those from maturity analyses and often it is for these completely fundamental processes that an overview is needed and that’s why the models are straightforward, with results and improvements often within reach,” explains Jørn. The Danske Bank case led to a five-step approach to improved knowledge transfer. This model is elaborated on in the book.

1. Identify gaps in your knowledge.
2. Identify knowledge transfer mechanisms.
3. Draw up a plan for knowledge transfer.
4. Implement the plan for knowledge transfer.
5. Evaluate the effect of the knowledge transfer.

Outsourcing and maturity are barriers to process enhancements

SourceIT was inspired by two previous projects – Centre for Software process improvement and Talent@it. “In previous consortia, we discovered that the outsourcing and maturity of companies examined were barriers or challenges to process enhancement and innovation as a whole,” explains project manager Jørn Johansen, who also managed the two previous projects.

“And we hope that, with this book, we have responded to those challenges and that we can help decision makers to make better sourcing decisions, regardless of their previous experience. And that we can inspire companies to retain their ability and capacity for innovation alongside a commitment to sourcing activities.”

Jørn Johansen is a Senior Technology Specialist at DELTA and an expert in maturity analysis and process improvements. Jan Pries-Heje is a professor of Computer Science at Roskilde University.

SourceIT is sponsored by the Danish Agency for Science, Technology and Innovation and the consortium consists of five partners: Danske Bank A/S, Nets A/S, CSC Scandihealth A/S, Roskilde University and DELTA.

SourceIT – Balancing Sourcing and Innovation in Information Systems Development

You can buy the book here: improvability@delta.dk. Price: DKK 250.