A consulting firm recommends aligning a service provider's full capabilities with a client's needs to boost innovation. A service provider often has decades of experience across multiple clients, giving them insights into emerging trends, competitors' strategies, and industry standards that exceeds a client's own expertise. Outsourcing through lowest-bid approaches limits benefits, while a "source-of-knowledge" model shares challenges and strategies between client and provider to support the most effective solutions. Perfectly aligning expertise and insights between the two partners can maximize innovation success.

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Innovation Outsourcing – Part 1
Boosting Innovation

2. Executive Summary
Service Provider’s experience often exceeds Client’s experience
Depth of experience – decades in business
Breadth of experience – multiple clients
Service Provider’s insight often exceeds Clients insight
emerging industry standards
emerging trends and patterns
competitor challenges
competitor solution strategies
Aligning Service Provider’s full capabilities with the Client’s
needs will boost innovation. And save Time and Money.
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3. Multiple
Clients
Full Alignment
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Project
Solution
Strategies
Competitor
Insight
Orga
Memory
Emerging
Trends
Source-of-
Knowledge
Outsourcing
Lowest Bidder
Outsourcing
ORDER
PAY
ALIGN-
MENT
Service Provider
Organisational Memory
Project
QUOTE
EXECUTE

4. Good Service Provider
• Expert in a limited area of science/technology having
• substantial organisational memory in this area
• Great depth of experience
• decades in business
• historic background allows to forecast upcoming trends
• Great breadth of experience
• multiple clients
• insight to a multitude of solution strategies
• Service Provider’s expertise frequently excels
Client’s expertise.
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5. Outsourcing Techniques I
• Lowest-Bidder Type of Outsourcing
• commodity approach
• strictly reduced to contractual obligations
• job gets done – but nothing else
• Sourcing model – quote, order, execute, pay
• scientific challenge remains with Client
• creativity challenge remains with Client
• selection of the best, the fastest, the most cost efficient way
forward remains with Client
• Service Provider’s capabilities not fully aligned with
Client’s objectives.
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6. Outsourcing Techniques II
• Source-of-Knowledge Type of Outsourcing
• boosting innovation
• objectives beyond contractual obligations also in focus
• significant upside potential – “Hidden Value”
• Source-of-Knowledge Outsourcing
• scientific challenge shared by Client and Service Provider
• creativity challenge shared by Client and Service Provider
• selection of best/fastest/most cost efficient strategy
supported by Service Provider’s organisational memory
• Service Provider’s full capabilities aligned with
Client’s objectives.
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7. Insights
• Service Provider collects industry insights
• emerging trends and patterns
• industry standards
• regulatory focus
• Service Provider collects insights from Client’s competitors
• challenges competitors are facing
• solution strategies applied by competitors
• that work
• that frequently fail
• Service Provider’s insights in industry and competition
frequently excel Client’s expertise.
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8. Alignment Pays Off
• Lowest-Bidder approach not ideal for Innovation Outsourcing
• service reduced to a commodity
• Client will receive a commodity
• Perfect alignment between
• Service Provider expertise and insights
• and Client needs
• will boost Innovation performance and success
• Source-of-Knowledge Type of Outsourcing is not the
cheapest but the most cost efficient.
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Innovation Outsourcing – how to get better by focusing on 4 action fields. Topic of one of the next issues