Outsourcing as co-Creation of Value


To be successful at outsourcing (specifically product development) the organisation must see it as a process of co-creation. Organisations that invest in outsourcing services for their product development either in wholesale fashion or as extended teams cannot judge the value of the purchase except at consumption. It is only at the point of the production and delivery of code that the customer can decide if his investment in the service is justified, and the anticipated value (value-in-use or value-in-context) is derived. The vendor can only proffer the quality and hence the value of the resource. Unlike a physical product such as a sandwich, which is tangible, offshoring is an example of an intangible product.

cocreate As a first recourse to mitigating the risk of his purchase the client can take part in the vendors team hiring process. But, in the long-term the only way for the customer to get the value out of his investment is to whole-heartedly embrace the principles of co-creation. Although, co-creation is touted for physical product development through customer (and the inclusion of social network trends etc.) inclusion, the principles of co-creation can also be applied for outsourcing of software product development. Value can be injected during the production process for a tangible product, a sandwich for example, the same cannot be said for a service. At least not to the point of being able to quantitatively compare your purchases, its value is one of in-use or in-context.

Implementing an environment to enable co-creation of the product development process requires:

  • One cannot execute a product development process with a distributed team without the requisite tools for communicating and managing of the development process and its artefacts. Using the right tools to provide a 360-degree view of the process to all participants in the product development process is the most important foundation of outsourced product development.
  • Setting up an agile tool and pushing tasks to the remote team is not by itself co-creation. There is more to co-creation than just task dispensation, which is just another disguise for keeping the remote team remote. Team involvement must be in all aspects of development including planning. Lack of inclusive participation in these aspects of the product is to stifle their creative contribution, and the consequence is higher attrition rates and increasing difficulties in filling the gap between the number of resources required and resources on board, leading to product delays and increased delivery pressure on the local teams.
  • The remote team is a collection of individuals; the team cannot be seen only through the eyes of the scrum/project manager, you have to occasionally massage the individual egos. That is, get the best out of each member of the team and not just the collective.
  • Using the right tools to provide a 360-degree view of the process to all participants in the product development process.

The vendor for his part attempts to increase the potential value in his service offerings. Although, the services offered do have customer encounters and interactions, they are not on the whole at a personal and/or memorable level, except perhaps in parts. The vendor can enhance his offering by designing services to contain both tangible components and intangible components, touching on just a few of them:

  • Exploit the new insights being opened up by the intrusion of big data analytics in the hiring process.
  • Bundling tooling as part of the service offering.
  • Applying gaming ideas for identifying team players, and/or whole teams!

In the end both vendor and customer must understand that their engagement is dependent on their appreciation in co-creating a successful product via a highly viable development process.




About KM Mukku

Kick-start, build and manage teams in product development (particularly in the financial domain), and enjoy all in adaptive case management, business process design and business process improvement. Currently holding the position of CTO at coMakeIT.
This entry was posted in agile, product outsourcing. Bookmark the permalink.

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