Out-collaboration: Build lasting analytics competency through a new type of partnership model
Blog Posts:Mu Sigma
Published On: 13 March 2015
Renowned management guru Tom Peters said, “Do what you do best, and outsource the rest.” His view is that companies should retain core functions, and let partners do everything else. For example, an insurer should retain responsibility for underwriting, but outsource payroll.
However what can a company do when it has low, or nascent, competence in a function like analytics, which is increasingly core to most companies? We don’t think they should outsource in that case, but rather, out-collaborate.
This more evolved view on outsourcing allows a company to form high-touch relationships with partners to build capabilities in core functions where they may have low competence. A common example is in analytics, which has become a core function for many firms even though few companies are truly adept at it. Rather than completely outsource the function – which provides little opportunity for the company to build competency over time – they can out-collaborate.
Mu Sigma is an out-collaboration partner for many Fortune 500 firms who want to develop better competency in analytics and decision sciences and consider it a core function for the firm. We focus only on analytics, day-in and day-out. Even though our clients tend to have well-funded analytics capabilities, Mu Sigma provides them with an integrated and ever-evolving decision and analytics support ecosystem of products, services and cross-industry experience. This not only enables the companies to make better decisions but also enables their staff to continually learn about the latest strategies and analytics tactics.
Unlike traditional outsourcers, out-collaboration partners will help with both ad-hoc and routine analytics work – accelerating the routine, helping to instill processes for the ad-hoc, and in both cases helping drive innovation through new approaches and new ideas.
Generally, Mu Sigma recommends that over the long term, host companies own efforts to solve specific problems – such as fraud models in the insurance space – because their in-house staff tends to have an abundance of high-context knowledge of the problems.
Ultimately, the greatest potential value of out-collaboration partners lies in their ability to address the overall approach to problem solving – at Mu Sigma, we call it the Art of Problem Solving system, and it involves habits, methods, and software that improve our clients’ ability to consume insights, eliminate blind spots, and make better decisions.
Has your company explored an out-collaboration model? Why or why not?