6. Share the Wealth

Of course, the provider as a whole needs some inspiration to innovate, too, particularly of the profit-boosting variety.

The concept of gain-sharing—rewarding the vendor when the client benefits from lower costs, increased revenue or improved efficiency—has always been a controversial one among outsourcing customers. But if there were ever a time to consider it, it's when you're seeking something above and beyond from outsourcing.

"I know how hard it is to consider gain-sharing. The discussion becomes a mini-joint venture, with issues of risk, reward, decisional authority, institutional impediments and shifting roles," says Bierce. "But this kind of discussion can be valuable."

You might set up a jointly funded pool to pay for agreed upon innovation initiatives or sharing of savings generated by particular innovation projects, says Masur. And the client doesn't necessarily have to take a financial hit. The IT outsourcing customer might allow the provider to use the resulting products or systems to deliver services to other customers or waive its right to benchmark if a vendor consistently achieves high innovation scores in 360-degree performance reviews. [Form:cio.com]