Designing a Sourcing Ecosystem for Strategic Innovation Through “Big Data” Applications

Abstract

Published research on innovation from Information Technology and Business Process Outsourcing (ITO/BPO) is rare [1]. Strategic innovation involves high uncertainties better addressed through agile methods and a collaborative approach [1, 2, 3]. Key success factors in delivering ITO/BPO innovation are high-quality relationships, trust and collaborative cultures [1, 2, 3, 4], and establishing an effective governance configuration. The authors report on longitudinal case studies of a global mining company (“GMC”) and a group of its suppliers aimed at understanding how GMC is developing “big data” applications to generate game-changing innovation. This paper describes how GMC has developed a “big data” platform to support internal staff, customers, consultants and third party suppliers to create applications that can transform global mining and smelting industries to deliver a price premium for GMC’s products. GMC has encountered a shortage of suitably experienced data scientists in its key operating locations resulting in a significant skills gap in its big data program. GMC’s sourcing strategy aims to build an open and collaborative ecosystem that draws upon secondary markets to help fill the skills gap. To create an environment in which open innovation [5] can flourish, GMC established an Analytics Speed Team (AST) as an internal consulting and program management group to drive faster progress with big data applications. A contribution of this research is to identify the role of AST in establishing an effective governance configuration for open innovation. A practical contribution is made by analysing the value of secondary markets for ITO services in a sourcing ecosystem optimised for delivering innovation.