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Deciding to Outsource or Re-Engineer First

BPO: Should CFOs Transfer Work Before Re-engineering Processes?

Many organizations do not believe they should outsource any business processes until they are consolidated, standardized and re-engineered. This position is frequently reinforced by many of the mainstream management-consulting firms.

The logic being… if the processes are not reengineered before I turn them over to the provider, I am giving away monies to the provider to optimize the processes. They may even charge me more on a run rate basis for operating the processes.

If an organization is very good at project execution and very good at dealing with the politics of change, then the logic of reengineering the work in-house may prove to be correct.

However, in WGroup’s experience most companies are experts in the goods or services they make or sell, but are not experts at project execution and are challenged by the politics of change. Therefore, we maintain that in most cases it makes much more sense to let the outsource provider do the consolidation, standardization and re-engineering work on the processes. Provider organization’s core competency is improving and operating processes.

Further Reading: WGroup recently published a Strategy Brief titled “The Next Generation IT of Outsourcing.” Click here to download a complimentary copy.

 

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For over ten years, Dr. Eric Liang has been advising C-level executives across a broad spectrum of industries that included automotive, aerospace, energy, pharmaceutical, electronics, consumer packaged goods, and non-profits on operational transformation and organizational transformation initiatives.
 

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