Whether to outsource….

Every issue of Harvard Business Review includes a hypothetical case study, together with commentaries by leading practitioners on what they recommend in the situation. The case study in the July-August issue, written by Nitin Nohria, titled “Feed R&D – or Farm it Out?” is a very interesting examination of a company that is wondering whether to outsource part of its R&D to India. Issues raised include accessing best-of-breed and potential loss of intellectual property. Of the four very interesting commentaries, the most striking is written by Azim Premji, chairman of Wipro, one of India’s top three technology services companies. He is cautious on the merits of outsourcing in this case, spends most of his analysis on the internal dynamics of the company involved, how to support collaboration, and emphasizes the importance of providing strong contractual protection of IP.