Wednesday, December 06, 2006

BPM and Outsourcing

A recent survey by EquaTerra [1] highlighted an important aspect of outsourcing: that most of the time, an outsourcing initiative is accompanied by a process improvement initiative.

Survey respondents fell into one of four categories:

They transformed their internal processes prior to implementing an outsourcing strategy;
They transformed their internal processes after implementing an outsourcing strategy;
They outsourced and adopted a continuous improvement framework;
They outsourced and maintained internal operations as-is.

Approaches to BPO
Not surprisingly, some 83% of respondents undertook some form of process improvement initiative along with their outsourcing strategy. Couple this with the notion that most outsourcing strategies are undertaken to save money (70% of respondents in a recent Deloitte Consulting survey) or to gain best practices (57% from the same survey), and you have an extremely compelling reason to marry any outsourcing initiative with a solid BPM effort.
Why Companies Outsource [2]

Surely, an outsourcing strategy absent a BPM effort will reduce the efficacy of the outsourcing initiative. You’ll note that many of my writings beg management to always consider the cultural aspects of the organization in which they're operating, and those with which they're collaborating when outsourcing – an aspect that’s all too often overlooked. Applying process management best practices around an outsourcing strategy provides a lethal dose of competitive curare. Those companies that execute correctly will surely claim leadership positions, if they haven’t already.
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[1] EquaTerra’s 1Q 2006 Pulse Survey

[2] Deloitte Consulting

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