BankerVision

Do we want our outsourcers to innovate?

Last night I was invited to speak at an event Fujitsu were holding for alumni of their graduate programme. Every so often, apparently, they get everyone whose been through their programme together for networking and so forth, whether they are still with the company or not.

So anyway, I'm at this event, and I got asked a question that does, sometimes, come up. Does a big company that outsources lots of its non-core business expect its outsourcing partners to do innovation on its behalf, or do we prefer to do it ourselves and just tell the partner what to do?

Frankly, since there's usually not enough innovation to go around, we'll take any that comes our way. That's capital "I" Innovation, of course, meaning an idea that's useful to us coupled with some execution behind it to make things happen.  Ideas by themselves aren't that valuable to anyone.

Let's face it, a lot of the time what we want to outsource is completely commodity. The nature of commodities is that there is usually not all that much that differentiates one provider from another, and price is quite often the key decision factor.

So if one of our outsourcing partners dreams up something that we can use, we'll likely just jump at it. But unfortunately, this doesn't often happen. Commodities, with their razor thin margins, don't leave all that much room for innovation. You usually need some money to invest, you see, to get things happening.

And those same margins don't leave much room for our partners to be responsive to our innovative requests either. And we get into the habit of thinking the money will be an issue no matter what, so in the end on our side of the fence we're probably just as much to blame.

So the answer to the question, really, is that we do expect our partners to be innovative, but the dynamics of the outsourcing game don't often make it possible.

It is unfortunate for both sides.

Bar Camp Bank London

The Saturday just past, I attended the inaugural Barcamp Bank in London, along with, I suppose, about 40 or so others. The event was held in the offices of Sun Microsystems. A great turnout I thought.

It was my first BarCamp, and I have to say that I'm now a convert to the unconference format. There's no set agenda, so the topics are decided by group consensus on the day of the event. Anyone can speak, and each session seemed to quickly get to group discussion, rather than the PowerPoint style speak-at-the-audience style we're generally used to at conferences.

My thought? Old style conferences are dead, or soon will be. My experience was that the information was timely, not dependent on the quality of individuals, and highly relevant. You don't normally get that from ordinary conferences.

The were a range of people there, also. Other banks, both UK and international, including some other Heads of Innovation. Many startups, particularly in the P2P lending space, all with various takes on banking and the business model in general. Some consultants and vendors, of course. And, naturally, quite a few bloggers, who, I am sure, will write rather more eloquently than I about the event.

There are photos from the event on Flickr, and Frederic Baud, one of the people who helped organise the event, has quite a bit to say about how these things work here.

I was talking with Frederic afterwards, and he suggested there might be value in a BarCampi (i for innovation). It would be an unconference on the subject of innovation generally, and how to do it, specifically. Any takers?