Innovation and Ethics in Sourcing

This weeks topics were innovation and ethics. Can you use sourcing as a strategy for innovation? Most sourcing guides suggest that you never outsource core competency. Regarding ethics, we need to be responsible for the impact and waste our sourcing activities have.

Innovation is the elephant in the room when it comes to outsourcing. Most decision matrices tell us that it’s not a good idea to outsourcing core aspects of our business. Innovation is likely to be key to success for many businesses. So can sourcing be used to generate innovation? One way might be re-organising work. Micro-sourcing for instance. If we break up the work into many different small pieces and manage them correctly using our own knowledge then sourcing could be used to create innovative solutions.

In addition, using sourcing for innovation can help share knowledge locally. Allowing the local area where the sourcing comes from to flourish in a knowledge economy and creating more people who can fill the skills gap. The more people with knowledge economy skills, the more innovation might emerge. Innovation hubs and spaces are good examples of this, and they can lead to the creation of innovative solutions for local needs. Perhaps this could even open up new unforeseen markets for our western businesses.

The question “What is outsourcing?” then dominated much of the class. With the likes of crowd sourcing, blockchain, and cloud assessed as to their suitability for being called “outsourcing”. Our lecturer making a key point in saying that “if you can take it back into your business then it is outsourcing”. Meaning that, if it’s a core part of your business that you remain competent in and understand, and you can bring it back into your company and do the job within your company then it is outsourcing. If you can’t do that, then you are essentially just buying something from someone else in an “off the shelf manner”.

Ethical issues within sourcing include, capital, language, staff turnover, access to resources, conflict. It’s important as leaders we understand how to manage these in a sustainable and eco friendly manner. Just because someone else is doing a job for us doesn’t mean we can forget about the consequences their decisions and ways of working cause. For example, if we are sourcing knowledge or business process outsourcing we should ensure the lives of those performing these jobs are looked after properly and the work impacts them positively. A video we viewed in class a few weeks ago showed a sourcing company telling their employees not to go be going home at 6pm. That attitude is not sustainable, efficient or in anyway helpful for long term goals of any business. Likewise if we are sourcing minerals or components for our offices, we need to ensure that we are not causing e-waste. Out of sight, out of mind is not good enough.

Don’t use sourcing as a way to hide problems, or shift them onto others, we are better than that, we must be better than that.


Donal Rafferty

Forever learning, Software Engineer, CoderDojo mentor, Smurfit Business School student, Photographer

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