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6 Ways to Foster Innovation in Outsourcing Projects

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Innovation is no longer just a buzzword, it’s a necessary part of doing business.

Organizations around the world are finding that innovation can occur in every corner of the company, from sales and human resources to products and customer services. The challenge, however, is accelerating that innovation and embracing it as part of the business culture.

When it comes to developing software, innovation can directly alleviate that challenge, as new applications or systems serve to improve how the company operates. Among other benefits, technological innovation can boost efficiency, reduce time to market, strengthen overall business value, and improve relationships with customers.

Software development outsourcing providers understand this and have formed many partnerships based on their ability to foster innovation. The best outsourcing partnerships are built on this foundation, with a working environment that makes room for experimentation, makes full use of the provider’s technological expertise, and ultimately positions innovation as a key component of the engagement.

If you’re looking to either build this foundation of innovation from scratch or strengthen your existing IT outsourcing projects, these best practices for fostering innovation should prove useful.

6 Ways to Foster Innovation in Outsourcing Projects

Encourage Transparency and Communication

As the client, it’s your responsibility to empower your partner teams to bring their ideas forward and actively engage in the innovation process. Regular in-person visits can help with this, as can project kickoffs, ideation or road mapping workshops, and team-building activities. True creativity and innovation are only possible if everyone speaks up, so be sure to encourage a meritocracy of ideas from both sides of the partnership.

Transparency removes blockers to innovation, so ideally, your IT outsourcing partner should display a culture of openness and pro-activeness, both within their business engagements and internally. Extending this transparency throughout the outsourcing relationship will further support progressive innovation, so be sure to find partners and teams that you can trust.

[Looking for the perfect IT Outsourcing Partner? Let’s Talk!]

Introduce Innovation Feedback Loops

Throughout the software development lifecycle, particularly in a DevOps or agile environment, there should be a system for efficient and consistent feedback loops involving all teams at all stages of the process, including development, data science, QA, operations, and any other project stakeholders. The same approach to feedback is essential for fostering innovation.

You and your software development outsourcing partner must work together to ensure you are constantly learning from your experiments and from each other. Innovation feedback loops are most beneficial for companies when they revolve around data, so consider using techniques such as monitoring, UX validations, demos, user acceptance testing (UAT), and so on, to validate your KPIs and help highlight areas where innovation could be adding the most value.

Build an Environment of Constant Exploration and Continuous Learning

When outsourcing, encourage both in-house and remote team members to explore different tools, technologies, and methodologies, even if it means making mistakes along the way.

Exploration doesn’t mean you have to commit to adopting or testing these tools or technologies, but it does give teams the motivation they need to stay up to date with cutting-edge advancements in the field, fostering innovation through new skills and capabilities.

An explorative environment allows team members to build a better understanding of the project and uncover ways to add value while staying engaged and motivated to learn. It’s important to communicate to the team that you trust them to experiment, but also show them how much you trust them by encouraging them to create a proof of concept and try their ideas out for real. In the end, that POC could turn into your next great innovation.

Schedule Time to Discuss Innovation

Another great practice for placing innovation at the core of your outsourced projects is to schedule time with your outsourcing partner to talk about it—that’s right, good, old-fashioned conversations. By holding dedicated meetings that focus solely on innovation, you can help your vendor to understand where exactly you want to innovate, what the limitations are, and what challenges you have faced in the past. This approach gives software development partners a broad view of your objectives, setting them up to tackle the most important areas in your business first.

Aside from leadership meetings and discussions, teams on both sides of the partnership should be empowered to share their knowledge and make learning part of the team culture. While many providers already have extensive experience in several verticals, it helps when in-house teams outline knowledge areas that outsourced teams should learn quickly, such as industry-specific trends or tools. Whether or not they are familiar with the concepts, this gives your outsourced teams a better idea of where to start and what to explore first, shaping the innovation process to be more efficient and valuable.

[Related Posts | 5 Nearshore Trends to Watch Closely in 2020]

Plan Out a Well-defined Scope of Work

Responsible, well-defined scopes of work (SOWs) are essential for any POCs or experiments undertaken by an outsourced software development team. Without them, the decision to test out something new can have lasting ramifications on the team, on the business, and on the outsourcing partnership.

SOWs are essentially an agreement between vendor and client, outlining whatever problem needs to be dealt with, the goals and objectives of the POC, any administrative requirements (like calls, meetings, etc.), and a timeline for completion.

POCs and new activities certainly form part of a healthy approach to innovation, as long as everyone is protected and they don’t impact your team’s ability to deliver. With a well-defined scope of work, both sides of the partnership can be confident in their freedom to innovate.

Define a Capability Sourcing Strategy

If your company lacks any specific capabilities associated with innovation, you may want to consider capability sourcing. For instance, perhaps your organization already has a team of data scientists working on ways to extract insights from your data repositories, but you need developers to build more innovative applications and user interfaces for them to work more efficiently.

If you’re looking for singular capabilities, find a software development outsourcing vendor that is well-versed in the acceleration of new technologies and trends. The most reliable partners are constantly building upon their skill sets, supplying talent with world-class capabilities across the wide spectrum of new and established technologies.

Looking to the Future: Innovation in 2020

It’s not always easy to ensure any of these activities within an IT outsourcing project, but the beginning of the year is the perfect time to start thinking about how you can facilitate more impactful results from your outsourcing team.


If you’re looking for an IT outsourcing project partner to help spur innovation, let’s talk!

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