Outsourcing Business Processes for Innovation -- Journal Article

The number of companies that outsource critical business processes to outside suppliers has been growing significantly worldwide. In 2012, companies outsourced some $309 billion of services -- activities including finance and accounting, human resource management, procurement and legal services -- and the overall volume has been growing at a rate of around 25% annually. Today, senior managers want more than the short term cost savings that may have initiated business process outsourcing. In high-performing relationships, the authors found that service providers perform ongoing innovation projects that deliver substantial long-term improvements to the client's operating efficiency, business process effectiveness and strategic performance. The authors found that an effetive leadership pair -- one person from the client organization ad another person from the provider organization -- went a long way toward invigorating the innovation process.