Why companies in pursuit of innovation and advantage outsource
Most companies have historically viewed IT outsourcing as a cost-reduction play1, simply a matter of transferring assets over to a provider who has the scale to deliver the service cheaper. Though justified by this cost reduction, this has often been at the expense of flexibility. The most innovative companies, however, have historically regarded outsourcing as a way to focus on their core business and differentiation, and as an enabler to growth2. The ongoing shift from IT as business cost to IT as business value1 means that more companies need to learn the lesson of effective outsourcing. Treating outsourcing as merely a cost-reduction mechanism can prevent innovation and slow down business growth. The objective, therefore, is to use Outsourcing as a platform for innovation; this means shifting away from seeing IT outsourcing as responsible for just the operation of systems and towards a full lifecycle view of outsourcing based on the IT and business services that are being provided. The next generation of IT Outsourcing is about providing full lifecycle support for¡ business services, not about keeping the lights on in application operation.