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Posted by Christopher Andrews on April 17, 2012
Year over year, Forrester hears from clients who are frustrated with their providers’ inability to provide innovation. In 2011, 60% of respondents to Forrester's Sourcing and Vendor Management Survey cited "Limited ability to define or provide innovation" as one of the top complaints when evaluating their suppliers. The frustrations behind these numbers include:
Service providers, of course, are eager to market themselves as innovative. They’re competing in a market filled with scrappy upstarts — and they’re all striving to differentiate offerings. Yet they are also frustrated with innovation — the innovation demands of clients. The common complaints we hear from them include:
A third group of people (clients and vendors) step back from these two arguments and tell us it’s not relevant. To these people, innovation is not something a third party can provide.
At Forrester, however, we believe that reliance on third parties for innovation is not only possible, it’s essential to the evolution of your company’s technology strategy. This stems from two important trends:
So what’s the role of sourcing groups in this innovation process? It’s a big one, but one that few organizations have realized today. It involves facilitating new commercial opportunities based on the resources and capabilities within your third-party supplier network. It requires your organization to do a few key things:
At Forrester, we’re collecting more supplier-driven innovation best practices in preparation for our two-day Sourcing and Vendor Management Forum in Las Vegas and Paris (see the link below where my colleague Christine Ferrusi Ross discusses the event). At each event, we’ll cover innovation in the services landscape, innovation in supplier engagement models/contracts, and innovation in vendor management. We welcome your comments on this post. We hope you can join us at the event!
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