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  March 21st, 2017 | Written by

Global Collaboration – A New Outsourcing Strategy

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  • Effective collaboration provides companies with a repertoire of skills not available in-house.
  • Collaboration can be used to support a firm’s strategy.
  • Collaboration forces managers to understand the competitive implications of partner selection.

To build a sustainable competitive advantage, leading companies are now using an advanced form of outsourcing dubbed global collaboration. For many companies, traditional outsourcing has led to significant cost savings and has improved their bottom-line. Today, companies are discovering even greater returns are possible and are using their global partners to drive top-line revenue with innovative new products and services, faster time‐to‐market and entrance into new markets. This shift from traditional outsourcing to global collaboration has become a competitive necessity which requires adjustments to the traditional outsourcing strategy and methods.

The process we’d like to showcase is a set of best practices that will help you develop the appropriate outsourcing strategy for your business to kickoff global collaboration.

Developing a global strategy can offer a variety of benefits for successful collaboration overall. Organizations that believe in this strategy not only view collaboration as a tool for reducing cost, but recognize how it can improve product differentiation through an increase in ideation. Successful organizations are able to achieve this by leveraging a partner’s superior capabilities and accessing their contextual knowledge. In combination with effective collaboration, this instant access to a repertoire of skills not available in-house enables you to lower costs, increase capability and take advantage of unique competencies. Viewing collaboration through this broader lens highlights how it can be used to support a firm’s strategy, which forces managers to understand the competitive implications of partner selection and assessing their merits on multiple dimensions.

Logistics, manufacturing can benefit
The logistics industry, including shipping, freight forwarding and manufacturing, can benefit greatly from the increase in innovation and resource sharing that comes from global collaboration. Many of the more agile companies within this industry have developed and implemented global strategies that have proven to be a valuable asset. Since the recent emergence of free trade agreements between nations, and a higher demand for goods and services than ever before, the logistics industry has grown exponentially. Logistics service providers that are able to create a transport and storage network that connects suppliers and customers across the globe tend to be able to perform at higher levels. Strategic and sound management along with applying the basic principles of global collaboration, where a network of people with different skills come together to achieve superior innovation performance, can provide them with much needed long-term viability.

Effective global collaboration requires defining the company’s goals, addressing employee concerns, adapting business processes and creating partner relationships. Open communication between teams is critical for cross-project coordination, problem solving and creating an environment of trust. Successful firms recognize the uncertainty in their innovation efforts and the need for senior management participation to seek mechanisms to overcome it. It’s important to understand that a more collaborative model is required to conquer these challenges. Firms that succeed in this area view partners as an extension of their development team, seek their participation in meetings and include them in internal communications. This ensures the tacit knowledge of a project’s context is retained, and communication between teams will likely improve. Understanding how to work together and appreciating the skills of each team member can also prove to be a huge advantage.

One of the biggest challenges in a global and virtual work environment is the inability to see how others are receiving our words across email, phone or instant messaging. Fortunately, video conferencing is now widely used in multinational companies and helps bridge communication gaps by conveying both body language and facial expressions. Staying connected with coworkers in other countries is essential to building rapport and it’s those bonds that create strong teamwork. The different time zones can also be used to your advantage resulting in around-the-clock business operations. This can speed up product development, reduce response time and enhance customer service.

New approaches to IP
Lastly, companies should look into the different options when it comes to the contract terms that govern the funding of projects and payment of rewards. Clear understanding early on of the projects cost and payout is important when aligning the incentives of both the client and partner. Ultimately, this will reduce the need to specify what is required from each on a daily basis, thus saving valuable time. When incorporating global collaboration at your company it’s essential to reward your partners’ ideas and not just the effort in developing them. In effect, you should give them a share of the pie, acknowledging that their ideas make the pie bigger.

Traditional approaches to IP (intellectual property) that assume a firm must develop, own, protect and isolate its IP are becoming increasingly outdated and the new trend is leaning toward a more flexible approach that outweighs the need for control. It’s undeniable that new ideas grow and develop through global collaboration. More and more organizations today are not only acknowledging the benefits that come from sharing those ideas, but are also encouraging them by offering additional rewards in the form of payouts.

In a rapidly changing business environment, organizations look to collaborative work processes to stimulate practices that will generate market value and gain a competitive edge. Individuals working together to create, share, and use knowledge are seen as essential to the effective real-time development and implementation of strategies that form the basis of organizational success. Adopting the most appropriate of these global collaboration best practices – strategically choosing global partners that complement the existing staff, forming open internal communication with new partners, and treating partners as an extension of the team – can expedite ideation and increase results by developing an individual or team to achieve current business goals, meet future challenges and build a capacity for change. In sum, collaboration is no longer a “nice to have.” It is a competitive necessity.

Sandesh Joshi is the president and co-founder of Indovance Inc. Prior to founding Indovance, one of the leading CAD and drafting outsourcing service providers in the world, Sandesh worked at SolidWorks Corporation as a senior R&D member.