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NOA Innovation SIG
by Tony Morgan, IBM
Thursday, October 16, 2014

On 8th October I chaired the final NOA Special Interest Group meeting on innovation for 2014. As always we had a great mix of all three groups of NOA members – buyers, suppliers and third party organisations – all with a vested interest in making innovation in sourcing relationships work.

The primary objective of the session was simple – to facilitate knowledge sharing and best practice between all three member groups so that attendees take the output of the discussions and lessons learned back into their day jobs.

In fact the NOA’s ongoing focus in innovation is the reason I got involved with the NOA in the first place – as my day job is to drive innovation for and with IBM’s IT outsourcing clients.

I always like to kick off the session with a few of my own experiences. This time I referred to the articles I created in tandem with Professor Ilan Oshri in the NOA’s Outsourcing Yearbook 2014 - http://www.noa.co.uk/files/545.pdf. Specifically I made the point that whether you have innovation built into a sourcing contract or not it will only work if you have the right people in place to drive ideas through to delivery – and that these need to be in both the client and supplier organisations. Sounds simple but it makes all the difference.

We like to run the SIG sessions in two halves – a point of view from guest speakers followed by an interactive discussion involving all the attendees. This time we had great presentations from KPMG and our hosts for the event, DLA Piper.

Jonathan Cohen from KPMG gave a great talk. Key points highlighted included the importance of placing business outcomes at the core of the sourcing strategy and putting in place a strong retained organisation which can manage change and drive innovation. Jonathan then went on to highlight the value of taking a step back and running a value assessment of an in-flight contract and relationship. He talked of the value of designing and managing a best fit operating model with innovation imbedded. One additional and very relevant point Jonathan made was a recommendation to develop a provider ecosystem for innovation.

Our second speaker, Anthony Day from legal firm DLA Piper, led another great discussion. Anthony started with the importance of thinking through and agreeing a definition of innovation. A point which I wholeheartedly endorse…! He spoke of cost as the “unspoken requirement” and also went on discuss a shift in the market to focus sourcing on delivery of innovation for wider business benefits.

Giving the legal view Anthony discussed the importance of the contract, highlighting that this should be an enabler rather than a stifler of innovation with incentives for both parties. Anthony made a point that the contractual implications of the client not pulling its weight on innovation should be considered as it takes both parties to focus for innovation in a souring relationship to work. The importance of measurement and governance were also clearly articulated in both Jonathan’s and Anthony’s talks.

We then opened up with a very interactive discussion which everyone attending took a really active part in. Key topics including funding with many interesting ideas and practical experiences of use of “seed fund” based approaches for the front end early stages of innovation development.

Additional key words during the debate included people, open-ness and honesty. The importance of a client-supplier cultural fit was highlighted by a number of the attendees from both end user and supplier organisations. In addition the power of positive communications in bringing out the value of innovations delivered was also discussed - particularly in the context of ensuring the value of innovation activity is measured and recognised by all parties.

All in all it was a lively debate with a high level of consensus on the importance of innovation and the need to work together to make innovation in sourcing work.

The session concluded with feedback from around the table with all concluding that it had been a valuable discussion with learning points from the shared experiences that a number of attendees would be taking back into their day jobs. There was much support for a follow on session early in 2015 and perhaps the need for a wider half day session with more attendees including case studies and examples.

If you have any questions on the session, ideas for 2015 or on innovation on sourcing in general please get in touch with me via my email address .(JavaScript must be enabled to view this email address).

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