Innovation and Outsourcing: TON’s Program at DTU Executive School of Business on May 26

May 30, 2016

BjörnThe TON network met this past Thursday at DTU’s Executive School of Business and spent the day discussing how (and if) innovation and outsourcing have symbiotic properties that are leveraged by our member organizations. Innovation clearly is the life-blood of business growth. How then do we apply it to outsourcing and offshoring in a way that can deliver on business goals?

 

Our program kicked-off with a presentation given by Björn Rudberg, Director Strategic Sourcing, Ericsson. Björn’s focus was on co-developing with vendors. Critical to being able to co-develop with vendors, noted Björn, is a change in mindset from the typical transactional, procurement-oriented thinking. Co-developing means that we need to establish commonly agreed upon goals and activities while also sharing an open economy and risk within the partnering area.Björn presentation

 

This is un-chartered area for many, indeed. Björn acknowledged that it’s easier to engage in this way when growth is part of the equation and that external factors like the financial crisis can in many instances make this kind of transparency and dependency almost impossible. Yet, the value that can be generated from complementary committed partnerships is worth exploring as it can be impossible to achieve otherwise, for instance due to specific technologies or markets.

 

Bettina and Lotte

Peter presentation

Peter Skyttegaard, Head of IT Strategy, Mærsk Line took the discussion in another direction, that is, the way in which Mærsk Line has innovated IT outsourcing models as a direct reflection of broader IT market strategies over the years. Mærsk Line is “the conveyer belt that makes global trade possible” and as such, has experienced rapid expansion along with the globe’s growth in trade over the past 20 years. During this growth, Mærsk Line has, at times, had an aggressively outsourced profile, and alternatively, a deep push to bring things back in-house, a cycle that is now coming back “in style” as digital transformation brings IT front-and-center with business strategy. The speed of change and the high demand for flexibility are challenging and disrupting traditional outsourcing models, demanding innovation.

 

Peter closed with a reflection that none of the models that Mærsk Line has used or will use have been end-states in themselves. Instead, they have been appropriate responses to business strategy, market conditions and availability. We can expect to see more change going forward.

 

SamOur afternoon program consisted of a mini-workshop on innovation and outsourcing. The opening salvo for the workshop came from Sam Kondo Steffensen, Program Director, DTU-Business, who declared that “sourcing is the future.” Steffensen’s point was that the industrial digital globalization unfolding now means that companies will be defined by a system of strategic relationships that enables them to develop and deliver value. Value eco-systems will develop around IP clusters begging the question of what, exactly, will a company be in the future?

Lars

The focus on knowledge-intensive contribution in a market place where the role of space/distance has markedly declined means that companies are moving away from a heavy manufacturing base towards one of tech convergence.

 

With these thoughts in mind, Zoran Perunovic, Associate Professor, DTU Executive School of Business, facilitated a small group discussion on innovation and outsourcing among TON member companies. Central to our discussions was hearing where companies are innovating and where they are outsourcing. Are there commonalities? Are there missed opportunities?

 

Some of the observations from among the group discussions were: “Our company will need to gain more maturity to be able to master the network thinking we’ve talked about today.” “We are predominantly utilizing incremental innovation. Radical innovation would require us to risk too much.” “We don’t think about the opportunity agenda, we think about the problem agenda.” Yet, there is a shared realization that, “We Katiecan’t be great at every single thing. We have got both to focus and to partner to be able to cover the scope of what we need to do.”

 

Our day’s program concluded with an ironic observation that by focusing on core, we are often limiting our companies to incremental innovation while excluding the possibilities of radical innovation. Food for thought.

 
Our next TON program will take place at LEGO on September 8. We will take a look at experimentation and course correction in outsourcing and offshoring. Should you be interested in hearing more about our TON network, please contact Katie Gove at kg@trellis.dk or take a look here: TON.

 


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