Smarter Outsourcing: An executive guide to understanding, planning and exploiting successful outsourcing relationships

The power to escalate

In fact, you can and should contract for demonstrable future innovation in an outsourcing deal. It works like this. The supplier must deliver its proposals for innovation in writing to the retained organization, with a basic business case and costs justification. If the retained organization likes the idea, it will escalate it for further consideration. But where the supplier feels it has been unfairly rebuffed, or that the innovation has not been sufficiently tested within the business, then it can escalate it for review itself, at least to the level of the business unit heads.

Alternatively, if the innovation is so sweeping and ground-breaking that it would enable a step-change in the business, there should be an automatic ...