Contracting For Innovation With Technology Service Providers

While innovation has been critical to the success of businesses for years, in the past decade interest in the term has exploded. Yet despite all of the hype, managing and measuring innovation remains an elusive concept to many sourcing and vendor management (SVM) professionals. In interviews with 10 leading technology service providers, we found that every service provider has different perspectives on innovation, and those perspectives are closely linked to the type of services they typically provide. SVM professionals who want to improve the level of innovation they get from their services contracts must first consider whether they have adequately defined their innovation objectives, picked the right service provider for those objectives, and linked their unique innovation metrics back to those objectives. These seemingly simple but challenging to execute steps will go a long way toward driving transparency and accountability in innovation programs.