Kraft’s Coulter Says Don’t Expect BPO Partners to be Innovation Leaders

Blogging Live – Chicago, Shared Services Outsourcing Network Summit:

Lee Coulter, SVP of Shared Services at Kraft FoodsEver wonder why you’re not getting the innovative spirit you had hoped for in your BPO services provider?

The common compliant among countless outsourcing clients is that after years of engaging with services providers, they end up with far less strategic input than they expected at the outset. Tackling complexities around pricing, contracts and the shared responsibility of stimulating more contributions from suppliers was the topic of a breakout session at today’s SSON Summit in Chicago.

“Innovation in its truest sense is intended to create a better business result,” said Lee Coulter, SVP Shared Services at Kraft Foods, who insisted that to get what you really want, sponsoring clients need to get business leaders involved in  “joint innovation project portfolios” which brings suppliers, stakeholders and project management teams together to identify the exact framework for an innovation roadmap. “Governance has to include a very different approach for innovation as compared to typical BPO projects.”

Coulter stressed that innovation cannot be lead by suppliers – instead “blue sky thinkers” from the client need to be the key drivers to ultimately bring real impact to business operations.

Coulter said client should be asking themselves these key questions as they tackle the often thorny topic of  innovation:

  • How difficult is it to innovate?
  • How did you run innovation previously?
  • What kind of people do innovation – are they broad thinkers?
  • Did you bring in supplier partners?
  • What kind of payback are you looking for in innovation?

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Coulter shared his experience with innovation management at Kraft which included a separate contract for innovation that was mapped out of seven years and included 10,000 hours of accounted work time from the provider. Such detail enables Coulter to extract greater insights around meeting objectives and identifying key metrics like ROI.

Other Coulter recommendations include:

  • If you work with a provider which has has Six Sigma or TQM capabilities, tap into these areas as ways to access discussions on building innovation.
  • It usually takes a year-and-a-half to get innovation running, so clients should be looking to introduce the discussion at the close of contract year one and not at the very outset of the overall project.