Managing Offshore IT

It was interesting to read about Ann’s views on this report stating “The EIU expects the number of companies with at least some R&D activity occurring overseas to increase from the current 65 percent to 84 percent by 2010. The number of companies outsourcing R&D to third parties is also expected to grow from 64 percent to 75 percent.”

Agreed, Organizations and executives are certainly looking to leverage external skills and talents when it comes to innovation; and the idea here is not very radical. Even a couple of years ago, the business press had begun talking up “Outsourcing Innovation” For instance Business Week ran an interesting article stating “First came manufacturing. Now companies are farming out R&D to cut costs and get new products to market faster. Are they going too far?” Even further back, James Quinn wrote about “Outsourcing Innovation: The New Engine of Growth” in MIT’s Sloan Management Review

What has changed in recent times is the greater confidence of corporate leaders [in sourcing nations] in the ability of offshore partners to deliver projects and work from halfway across toe globe.

Researchers are certainly looking at different aspects of outsourcing Innovation. For instance, Prof Kevin Desouza blogs "Most organizations have realized that they cannot reach business goals by conducting all activities internally. Cooperating with business partners and leveraging the know-how found in an organization's midst is a salient determinant of competitive successes. Many organizations struggle to increase the intensity and success of partnerships."

During my interactions with technology executives and leaders, I find that they are looking beyond such publications touting Innovation Outsourcing. Essentially asking “what does this mean to me and my organization?” or “how do I ensure my team also leverages such practices and applies them in our context?

And this was the topic of my previous blog, talking about my Cutter IT Journal paper where I also illustrate a case study on ‘IT Innovation’ by establishing a Globalized Center of Excellence (CoE). The case study I wrote about was based on an engagement with a large client where our (Infosys’) globally-collocated team collaborated with the client’s team to establish a CoE. The goal was to foster and manage a culture of ‘technology innovation’ while leveraging a globally distributed team. For specifics of this case-study you could refer to the Cutter article and of course buzz me.