by Stephanie Overby

How design thinking can transform IT outsourcing

Apr 26, 2017
Managed Cloud ServicesOutsourcingTechnology Industry

In the era of digital transformation, design thinking can enable a new way of working between IT outsourcing customers and providers.

2016 digital transformation
Credit: Thinkstock

As the drivers for outsourcing IT services have shifted from the simple tactical requirements to do something faster, cheaper or more efficiently to the need to achieve more strategic business outcomes, both outsourcing customers and providers have begun exploring new ways to design and deliver IT services.

One method that’s getting increased attention is the design thinking approach. The user-centric tactic for product design, which marries customer input with new technology development, can provide an outlet and a framework for creativity, according to Barbra McGann, chief research officer with outsourcing research and advisory firm HfS Research. Rather than looking at process and technology improvements in isolation, design thinking expands the focus to include user empathy and business context.

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While not necessarily a replacement for established IT service delivery methods and models, which remain valuable tools in IT outsourcing, according to McGann, design thinking is emerging as a complement for service providers seeking to deliver more impactful results for their customers.

Linking up for design thinking

Design thinking is a term that was first introduced in a 1987 book on architecture and urban planning. Its precepts, however, predate that. Robert McKim of Stanford University’s School of Engineering introduced a similar iterative design process that in 1973, and engineer Rolf Faste expanded on the approach to design thinking courses at Stanford in the ‘80s and ‘90s.

Nearby Palo Alto-based design and consulting firm IDEO grew to build a thriving business helping companies apply design thinking — which it defines as “a human-centered approach to innovation that draws from the designer’s toolkit to integrate the needs of people, the possibilities of technology, and the requirements for business success” — to product and service development.

And today, IT service providers are adopting the approach. Design thinking is taking shape as an integral part of business processes and outsourcing solutions at providers including Accenture, Capgemini, Cognizant, Genpact, Infosys, Tech Mahindra, and Wipro, among others, according to a recent report by HfS Research.

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A number of consulting and outsourcing firms have acquired boutique design thinking shops in recent years from Accenture’s purchase of Fjord (2013) and Chaotic Moon (2015) and Wipro’s purchase of Designit (2015) to Cognizant’s acquisition of Idea Couture (2016) and Tech Mahindra’s acquisition of BIO Agency (2106). Many others are partnering with design thinking or academic institutions with design-thinking curricula. Genpact is working with Elixir Design, for example, and Infosys has partnered with Stanford’ Graduate School of Business.

A blueprint for business change

With most outsourcing customers looking to “digitally transform” but struggling with where to begin, design thinking can be a catalyst for innovation and change, says McGann. Design thinking can provide a new way for IT service provider and customer to work together to figure out how to achieve business outcomes and develop solutions that can be flexible and change as the market does.

“It’s a human-centered, empathetic approach to innovation that involved thinking about what the needs of the people you are trying to address and what their pain points are,” McGann explained in a recent webinar on the topic of design thinking. “You don’t start with the technology, you find out how to use technology to get [users/customers] further along in their journey.

But because it is a new way of working, it takes both the willingness to experiment and the time to integrate new design thinking methodologies into the engagement, says McGann. IT outsourcing customers and providers have to rethink roles, governance, budgets, and contracts. Both parties have to be committed to making the new approach work.

The IT services industry has hit the point of diminishing returns with the “your mess for less” propositions of old. While operational excellence and repeatable process will remain important, the more creative, flexible — and questioning — approaches of design thinking firms can complement that. The resulting systems or solutions can be engaging and simple while still standardized and efficient. Sometimes the answer may not be a technology solution at all, but a much simpler fix. In other cases, the design thinking digging will yield a whole new way of working.

Design thinking integrates “the needs of people, the possibility of technologies, and the requirements for business success,” says McGann. “And at the center of it all is empathy.” And although it’s designed to increase innovation and creativity, it is ultimately an outcome-driven approach. “There is a bias toward action. If you think there’s a change to be made, start working toward that. Ask a question. Try something. Give people something to work about and talk about,” McGann says. “But it’s also about being mindful of process. It’s not about abandoning process, but stepping outside of that process to think about what results you’re looking for and what experiences you’re trying to create and moving along that journey to results. ”

In the digital area, there are so many levers companies can pull to try to drive result s —robotics and automation, cognitive computing, mobile platforms, big data analytics. Design thinking can give outsourcing customers and providers a place to start. “It gives service buyer and service provider something to focus on — [the user/customer experience]–that’s shared and recognized by both parties,” McGann says. “Design thinking is not always the right approach, but if you’re looking to change outcomes or change relationships, it’s worth considering.”