THE IMPORTANCE OF INNOVATION IN STRATEGIC MARKET MANAGEMENT

Abstract

This study presents a theoretical review of the literature on strategic innovation through outsourcing in the field of Information Systems (IS). The competitive landscape in the Information Technology Outsourcing (ITO) and Business Process Outsourcing (BPO) industries has evolved over the past decade, shifting towards trust-based relationships and a focus on innovative strategic thinking. However, conflicts can arise between cost-focused engagements and innovation-focused engagements. This review aims to connect the fragmented insights from various management domains to the domain of IS outsourcing. By synthesizing 95 papers published between 1998 and 2020, the study develops an integrative framework that outlines the phases involved in achieving strategic innovation in the outsourcing context. The review contributes to the literature by contrasting research findings on innovation-oriented outsourcing with cost-oriented outsourcing and proposing future research directions to advance understanding in this area. This theoretical review explores the role of strategic innovation in the context of Information Technology Outsourcing (ITO) and Business Process Outsourcing (BPO). The study addresses the increasing focus on innovative strategic thinking in trust-based relationships between clients and service providers, as well as the conflicts that can arise between cost-focused engagements and innovation-focused engagements. The review integrates insights from various research streams and proposes an integrative framework that captures the different phases of strategic innovation in outsourcing. The study contributes to the literature on IS outsourcing by providing a comprehensive framework, highlighting the contrast between innovation-oriented and cost-oriented outsourcing, and suggesting directions for future research. The review incorporates 95 papers published between 1998 and 2020, with a focus on IS, innovation, and general management. The grounded theory methods for literature reviews are used in the study. Overall, this review offers valuable insights into strategic innovation through outsourcing and its implications for organizations.