The Transformational CIO: Leadership and Innovation Strategies for IT Executives in a Rapidly Changing World

Little Ideas Can Go a Long Way

Although most of us still associate outsourcing with cost-cutting, outsourcing can also be a source of innovation. “You don't always have to look for the big idea,” says Laxman. “A lot of little ideas can add up. There's power in incremental innovation.”

Smart outsourcing allows the CIO to pursue new ideas without incurring many of the risks. But this is where the concept of taking a more nuanced approach to outsourcing becomes really critical. One of Laxman's standing rules is to look for the right combination of business goal and outsourcer.

What does he mean by this? He is making a simple point that is often overlooked by CIOs: Not all outsourcers are created equal; they all have different strengths and bring different capabilities to the table. Some specialize in providing services, while others specialize in providing new technologies. Some specialize in large-scale engagements, while others specialize in smaller engagements. Some specialize in certain industries. For example, if you're in a highly regulated industry, you might want to think twice about contracting with a vendor that specializes in industries where there is little regulatory oversight.

Lesson

Not all outsourcers are created equal; they all have different strengths and bring different capabilities to the table. Some specialize in providing services, while others specialize in providing new technologies.

My friend Peter Logothetis, the head of technology services at QBE the Americas, ...