Does A Correlation Exist Between Outsourcing And Process Re-Engineering?

Traditionally, the main driver for outsourcing and off-shoring has been cost, leveraging arbitrage. Increasingly however the reasons for outsourcing are evolving.

The top reasons now include :

  • Access to world class talent
  • Multi country strategy for reducing risk
  • And a catalyst for process improvements, process re-engineering and driving world class standards

In my twelve years of outsourcing experience with InfoMate Pvt Limited, I have observed a clear link between outsourcing and process re-engineering and process improvements are almost an inevitable result companies outsourcing could expect from a dedicated outsourcing service provider.

The reasons for this include,

  1. Visibility of processes:
    Processes, when managed in-house, are handled by an individual, often according to historical reasons no longer relevant and processes have often times not reviewed for years! All too often one hears protestations, “this is how it’s always been done”, “this is the way I’ve always handled it” and “this is what I was taught”. The moment the outsourcing party comes on board, processes become visible and lively discussions on processes soon follow with questions, alternatives and best practices debated.
  2. Documentation of processes:
    outsourced processes are documented, flow chartered and signed off as part of the migration process.
  3. Familiarity with best practices:
    The outsourced service provider has extensive experience handling multiple companies, familiarity with best practices and has a wealth of leanings from prior experience which could be brought to the table.
  4. Use of KPIs, Metrics:
    A mature outsourced services provider employs a variety of process metrics to monitor every aspect of the process including cycle times, turnaround times, accuracy score, productivity and average handled time. These facilitate monitoring of trends and continuous improvement
  5. Expertise and specialist skill sets:
    Availability of specialist resources and skill sets, such as Six Sigma, process excellence and lean are a standard feature in the cadre of the outsourced service provider
  6. Software and tools:
    Outsourced providers have access to a variety of tools including document management applications, robotic process automation tools, process mapping and analytical tools and international benchmarks

Jehan Perinpanayagam ( FCCA, FCMA)

Chief Executive Officer, InfoMate (Private) Limited