Let us study this at the example of a call center.
I was working with a company which had decided to outsource certrain Customer Service activities, as the amount of inbound service calls was too much for the organization to handle, and there just weren't enough CSR's who were capable of handling the sheer volume of customer requests. The obvious solution? Get a call center to receive the calls and create tickets for the remaining staff.
Let's explore really quick how the "legacy process" of this organization worked:
This process took roughly 10 minutes to get a customer satisfied and the work off the desk.
Prepare for outsourcingLet's look at the process created by the organization. It's still rather simple and straightforward, minimal and down to the point:
Adding queuesThe first notable, and obviously intended, difference is that the activity is now split between two organizational units: The Call Center agents operate in a different unit from the Backoffice CSRs. This separation introduced asynchronity, i.e. the customer doesn't get served on the phone, but later, when a CSR resolves the ticket. An additional activity, reaching out to the customer, has been added to the process - and with this additional activity, we introduce an additional difficulty: How do reach the customer?
And soon, the process looked like this:
Quality IssuesThe split of activities caused another problem: Instead of the erratic "customer calls" queue with an ideal size of 0, we have a dispatching queue for tickets, with an undetermined ideal size. The hand-over point between the agents creating the ticket and the agents resolving them suffers from information loss, so the quality of the communication needed to be controlled.
Don't worry, we're not done yet - we wouldn't want to leave a process hanging mid-air. Once quality was managed, it didn't take long to realize there were actually significant quality issues related to lack of knowledge of this complex process. And there's an obvious solution:
Process ManagementAt every point where the fragmentation of the work caused a knowledge gap regarding the consequences of a person's action, there needs to be an improvement. Those improvements affect a large chain, so they need to be properly planned, orchestrated and coordinated. Bingo - the result: we add a process management function.
And this is the glorious picture of an outsourcing strategy for a process which consisted of two steps and a whole bunch of tacit knowledge:
You can guess that this process still isn't reliable, definitely not cheaper and significantly slower than the original process.