Seizing the ‘ownsourcing’ advantage

As enterprises rapidly digitize, they are rethinking how to best build global teams and drive transformational innovation. ‘Ownsourcing’ – as opposed to ‘outsourcing’ – is now the method of choice for those enterprises aiming to better align global teams with their overarching strategic goals.

What exactly is ‘ownsourcing’? In simple terms, ownsourcing empowers companies to build new teams internally via global capability centers (GCCs), rather than relying on outside – and disconnected – service providers.

With ownsourcing, companies take actual ownership of the GCCs they establish and employees hired within the GCC fall under the parent organization’s umbrella. This approach unleashes employee responsiveness and accountability, which in turn drives growth and innovation, a key benefit over the outsourcing approach where the service provider manages the entire facility and its employees.

What’s more, ownsourcing provides companies with enhanced cybersecurity, insures against unplanned disruptions, unites global teams under one company culture, and also eliminates many of the hidden costs associated with outsourcing.

Better business alignment

When it comes to investing in new technology, organizations that ‘ownsource’ gain better control over innovation and day-to-day IT operations and processes.

This is all the more crucial, given the outsized role technology plays in business today – from driving daily operations to the development of new products and services. Technologies such as AI and machine learning, cloud computing, 5G and augmented and virtual reality are among the most important technologies in 2022 (and beyond) according to tech leaders.

The trend is clear: according to a recent survey of 200 global companies on their IT outsourcing strategies, 46% of respondents plan to do more to develop their in-house capabilities to mitigate risks, especially for critical functions.

At the same time, 96% of the companies surveyed admitted that hiring the digital talent they need will be a challenge. A worldwide survey of tech leaders reflected the same sentiment, as they cite the hiring of digital talent among the top challenges they face in 2022 and in the years ahead.

The truth remains that in-house teams will have a deeper understanding of their employer’s overall growth and innovation priorities. Additionally, communication is easier simply because tech teams usually work across all departments – from finance to sales to HR – of an enterprise.

On that score, ownsourcing is all about keeping what is core to the business – such as system design and product development – in-house, while partnering with service providers on an as-needed basis to augment this in line with the strategic aims of the organization.

The key to impactful innovation

In fact, one of the top complaints about the old outsourcing model is that it produces a ‘box-checking’ mentality, and a corresponding lack of innovation and entrepreneurial drive among employees at outsourced centers.

Due to competitive pressures, outsourcing providers must embrace a ‘cost-mentality’ to win deals. That squeezes margins and profit expectations. This reality gives account management teams little room to provide creative ideas and fund innovative pilots and projects.

However, when companies ownsource global teams via a GCC, they are better positioned to deliver new technologies aligned with enterprise priorities. Furthermore, they will be able to build teams that provide the crucial supporting infrastructure needed to link innovation together as a product, service, or offering that drives business growth in meaningful ways.

Equipped with the contextual knowledge only privy to internal employees, employees at a GCC are highly motivated and capable of contributing to the ideation that results in the development of new products and services.

Achieving cultural alignment – and cost reductions

On a similar note, outsourcing can also strain relationships between teams, particularly if the third-party solutions provider has vastly different organizational structures and workflows than the client company. Ownsourcing solves this dilemma because GCC teams are fully embedded into the organization and, therefore, their motivations and values are aligned with full-time employees.

Additionally, the outsourcing partner takes a profit from its clients. But when companies ownsource, they manage costs internally, and launch new initiatives with a level of competence that matches – and often surpasses – the competence levels in an outsourcing partner.

Nevertheless, to enable long term success and viability, organizations must measure the ROI from their GCCs not only on cost savings, but also on the business impact and innovation they deliver. When scaling their GCC operations, enterprises should prioritize sustainable growth instead of speed, and also be purposeful about instilling the company’s culture and replicating the company’s talent management strategy at their GCCs to retain top talent.

Ownsourcing is the future

In summary, the drivers behind the decision to ownsource include: a CEO-mandate to change corporate sourcing strategy; a way to remediate a troubled outsourcing relationship; or a desire to find the optimal mix of in-house and outsourced services based on current business goals.

GCCs – as opposed to outsourced centers – will be an integral part of a large-scale enterprise’s resilient growth strategy as they bring with them the diversity of thought, perspectives and experiences, as well as in-demand technical skills, needed to help multinationals thrive.