California Management Review

Abstract

As the outsourcing market has matured over the past 20 years, clients and suppliers have begun to examine how these complex relationships can not only achieve cost savings, but also enable innovation in today’s dynamic business environment. This article presents four case studies of large-scale information technology outsourcing relationships that take equal measure of the clients and suppliers. It develops a model of innovation within outsourcing relationships consisting of nine key enablers for achieving innovation. The article then links the key enablers to three levels of innovation that were identified within the case studies. The model provides insight into how executives within outsourcing relationships can move from a cost management focus to a focus on innovation and (ultimately) business value for the client and supplier.

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