Who wins in the innovation game?
Why do we hear so much more about innovation than actually see it? And which sourcing model offers you better innovation? We put this question to G6 panelist Tiger Tyagarajan, COO of Genpact.
Innovation is driven by three factors, says Tiger. First, you need a deep partnership between the services center and its client; second you need an alignment of goals – incentives - across both parties so that both benefit from improvement; and third you need access to intelligence, benchmarking and capabilities that push you along this path.
The root of the problem, says Tiger, is that shared services are generally not structured as profit centers; rather, they are run as cost centers. So the incentives are not there. BPO providers, on the other hand, are structured for profit. But the crux is the third driver – if you are only servicing one customer you can’t leverage the breadth and depth of data and knowledge that a provider can with its 100s of clients. A clear win for the provider market, says Tiger.