Often companies reduce their innovation capabilities when they outsource part of their business to an outsourcing provider. The outsourcing provider’s charter is to continuously optimize the processes or projects that is outsourced to them and think of newer ways to solve the business problems that the current processes and IT projects are solving.
Better integrating outsourcing partners in the organization design by allowing the outsourcing partner’s management team in on key decision-making capabilities, thereby providing them the responsibility and accountability to solve business problems, will increase the value from outsourcing relationships. This would require bold decisions and clear vision from the senior management team as they will face resistance from their middle management teams.
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