Building Innovation into the Outsourcing Relationship: A Case Study

Abstract

This teaching case has been developed for a global consumer products company. Interviews from several outsourcing managers and executives within the company have contributed to the case. This case focuses on how a company can build innovation into an outsourcing relationship when it has not been explicitly stated in the outsourcing agreement. The two fictitious companies in this case are Bentley & Brooks (B&B) (the client) and AlphaCorp (the provider). Both companies are based on, but are not accurate portrayals of, actual companies that are anonymous. The case is a composite of several actual outsourcing cases between the two companies. B&B has outsourced much of their human resource operations and IT support. They have been frustrated that their global outsource provider, AlphaCorp, has not been able to bring innovation to the relationship. In the outsourcing contract, innovation was not expressly identified, but was certainly discussed during the outsourcing proposal and negotiations. In addition, the ability of AlphaCorp to deliver consistent quality of service on a global basis has been uneven, particularly in Latin America. You will be asked to take on the role of a B&B employee who is part of a team looking into the innovation problem. The team has been asked to provide answers to three key questions and to present their recommendations to a panel of senior executives of B&B.