5 comments on “Five Reasons to use Outsourcing in Innovation Crescendo

  1. Outsourcing of R&D work can be extremely helpful if the resources being outsourced are not available internally. Unfortunately, it is not a free lunch. The work must be controlled; placing the proposal out to bid, contract negotiations, quality audits, etc., and supervised or the results will very rarely meet desired quality and/or content expectations. That means that resources must be expended to control/supervise the work. A very careful resource evaluation must be made to justify whether the outsourced work versus internal addition is value added.

    Another issue is that when one hires an outside contractor there can be a significant loss of personal ownership for the work being done. Personal ownership of work is a critical issue in insuring the quality of the work. As an example, McNeil “saved” money when it shifted the entire analytical product testing to contract employees. Contract employees whose concern was to conduct a certain number of test procedures per day. It was not to the contract employee’s benefit to report, discuss or champion the resolution of any observed problems. As a result, many of the issues that lead to many of the McNeil recalls were not brought to management’s attention until too late for simple corrective action.

    • Two very good points…..yes it does take resources to manage outsourcing, especially if it is not going well. Your second point about having skin in the game is good too! I think quality can suffer with outsourcing unless the outsourced product or services are carefully scrutinized. Good topics for a future post! Thanks for the comments…..

  2. Pingback: New Open Source Models for Innovation… Harnessing the Power of Social Networking by Crowdfunding, Crowdsourcing & Crowdvoting | Innovation Crescendo

  3. Pingback: Where have all the (young) R&D Scientists Gone? Understanding the R&D Knowledge Gap in Pharmaceutical Companies | Innovation Crescendo

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