Innovation in outsourcing should be a joint effort

By TS Sharat, Clairvolex Knowledge Processes
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Innovation has assumed high priority in the agendas of leading businesses. In the past, innovation was often viewed as a necessary evil but today it is integral to growth and sustainability.

Outsourcing of IP and legal services has become a common phenomenon across the globe, owing to the extensively analysed and well-publicized benefits that it promises.

TS Sharat Engineer Clairvolex Knowledge Processes
TS Sharat
Engineer
Clairvolex Knowledge Processes

Foreseeing the various implementation challenges associated with outsourcing, clients often begin by outsourcing only low-risk and low-complexity functions. When this is successful, the validation of the outsourcing model paves the way for outsourcing of higher-complexity and higher-value functions.

What remains to be seen is whether consistent quality standards and dependable vendor service can be maintained; if they can, clients may be encouraged to create dedicated (or “captive”) legal process outsourcing supply centres in offshore locations, to which they send a steady flow of work. Corporations like GE have demonstrated considerable success in using such an outsourcing model.

In times of economic slowdown, there has been a declining interest among clients towards outsourcing. However, innovation remains popular and powerful even in the worst of economic conditions; businesses invest heavily in R&D activities to create new ideas for service offerings or products that can retain and attract income in difficult times.

In the prevailing economic situation a great need for innovation is being felt, especially in the IP and legal outsourcing domain. Outsourcing vendors have evolved their service offerings, and are now proposing new technologies and innovative service approaches to their clients. Interestingly, some of the highest-stake outsourcing deals involve clients who explicitly demand innovation as a significant part of the provider’s service.

In order to ensure that innovation is fostered and exploited effectively, it is important for vendors and clients to work together: firstly, to identify the needs and goals towards which creative innovation is to be focused; and secondly, to develop the right working environment in which to enable it.

A successful approach therefore may be that of joint innovation, in which a range of strategies and tools can be used to discover and implement new ways of outsourcing. In such an approach, the focus shifts away from simple cost-efficiency to strategic partnerships in which outsourcing vendors become an important and integral source of new business ideas and methods. Joint innovation programmes enable the client and the vendor to work together in developing responsive, effective business models.

Innovation in IP and legal outsourcing can be understood under the headings of generation, actualization, prioritization and development of new service offerings.

An example of innovation in outsourcing project development is the use of an algorithm or a program that assists in the identification of candidate functions for outsourcing, based on qualitative and quantitative parameters.

The influence of the parameters on a given function (if outsourced) can be quantified using a defined metric system and based on a calculated score; in this way, a list of the most profitably outsourceable functions can be generated.

Such an investigative process can only be implemented successfully within a synergistic and collaborative vendor-client relationship; the vendors need to take into account the various parameters and their influence, both of which can be very subjective depending upon a particular function for a given client, and therefore they need a high level of access and communication with the client.

Interestingly, IBM recently filed a patent application titled “Strategic Global Resource Sourcing” (US 2009/0083107 published on 26 March), which is an attempt towards creating a machine for determining sourcing strategies.

Innovation can also lead to a novel method of performing an existing IP or legal function, where the novelty brings about considerable savings in cost and time. For example, in IP and in legal outsourcing, partial or complete automation of functions such as patent analysis, valuation, proofreading and maintenance can result in improved efficiency, cost effectiveness and accuracy of results.

It is the responsibility of outsourcing vendors to initiate such innovation, inspiring their clients to think beyond the typical boundaries of tried and tested processes so as to come up with new and better ways of managing IP, either at the operational level or the services level. The next phase of joint innovation could be the piloting of new methods, embodying the innovation within a controlled environment. The success of such pilot programmes may usher in customized IP and legal service offerings which can be prototyped and brought to the market as a new service.

The ultimate goal of joint innovation should be the generation of a fresh, customized business model that provides an inherent and appreciable value proposition for the client, and a characteristic differentiator for the vendor in terms of proven ability for lateral thinking in outsourcing.

TS Sharat is a senior patent engineer and leads the Intellectual Property Support Services Unit at Clairvolex Knowledge Processes, a Delhi-based legal outsourcing firm.

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