Outsourcing: a matter of understanding the process … no, rather the customer

For some decades, many companies have decided to outsource certain departments, as it would bring … yessss, considerable cost-savings! Based on prepared excel calculations and moving around some numbers a clear profitable outcome was being defined. Especially, when offshoring brought a considerable wage-difference as opposed to the in-house scenario. And if the company has offices all around the world, one could bring all of it together in one place and standardise the process!

Well, the cost-saving figure has perhaps created a slight blind spot in your decision-making that could kill your project before you even realise it.

After mapping the involved business processes (I will take here finance and accounting processes as a guide), meticulously describing each and every step, hiring and training of new staff, and having thrown a flashy party for the go-live event, the momentum will kick in, where you realise that there is more to it than copying simple procedures…

"A business process is never a universal solution; just a general guideline, which needs many cultural add-ons to become at least workable, let alone successful"

In theory, it seems very simple. Initially. But several clients have overlooked major issues in the transition process:

  • when outsourcing a process, be aware that the staff (who probably will be laid off) have serious resentments against the whole project. There is a chance, that they might not tell everything they know
  • hardly any company has all its processes mapped properly (if at all). Most of the know-how is in the heads of people that might have spent over 10-20 years in that job. Even in case they would fully co-operate in the knowledge-transfer (see previous point), they would still forget to mention a portion of their expertise
  • not all processed documents are in one and the same language (e.g. English). Dealing with foreign customers, their suppliers/clients provide documents in various languages.
  • if staff is being hired based on their language skills, they are not necessarily apt accountants or bookkeepers; much of the processes is strange territory (and admit, the staff hired are mostly starters, to fit rather the cheaper salary group, and you wish to keep training costs low as possible – in one case I witnessed even no trainings were in place)
  • when staff is not fully equipped, you face fluctuations, (time)costly hiring processes, learning-curves,…
  • local fiscal requirements vary from country to country, where your customer has certain strictly defined process, one cannot automatically swap for another or standardise (curtail) it because another transaction seems much simpler.
  • also local cultural (social) interactions may differ and much friction starts accumulating, when client contacts individual staff to talk over erroneous elements in the system caused for whichever reason in one fairly sad case, even the provider refused to delve on SLA’s, as “the customer simply had to do with what the provider would provide”
Such a cocktail is deadly; the customer will slowly withdraw the outsourced project and come to the conclusion that the whole exercise has been … a costly experience.

Although the aforementioned scenario is not a fictional doom-scenario, but based on hands-on experience from my past, where simple logic was being overlooked by simply another palatable teaser: the juicy profit.

A business process is never a universal solution; just a general guideline, which needs many cultural add-ons to become at least workable, let alone successful. Disregarding the customers culture (its business, its language and the way of interacting, etc.) will make your prestigious project sooner or later come to a slow and grinding halt. Because the bottom line is, it’s not about the intricate workflows; it’s about you willing to (try to) really understand the customer (and his needs).

These just described experiences, among others, have made me decide to become a dedicated and passionate management consultant to help avoiding such pitfalls and make both provider and customer smoothly cooperating partners. It saves much friction, money and frustrations, when taking a few steps back and trying to understand the whole process as it is. With flow4biz.eu we create such a stable platform to strengthen your business. Less costly as you think, for the resource you already have in-house. It’s just the way how to go about it…

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