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Is Outsourcing Process Improvement Activities a Shorter Path to Bottom Line Results?

January 4th, 2011
Outsourced Process Improvement - Lean, Six Sigma, BPM

With today’s lean workforces, outsourcing important process improvement activities to a specialist partner may be the path to results …

One trend I saw throughout 2010 (and 2009 for that matter) was a intense focus on doing more with less.  Business is picking up substantially for many companies, BUT the willingness to hire certainly has not.   Personally, I think this trend will continue unabated through 2011.  Companies are very lean and have realized very high levels of productivity (and profitability), and are simply unwilling to go back to the old ways of thinking (i.e. “bloated” workforces).  Outsource certain activities to specialist providers, and figure out how to do more with the same resource levels internally.  As I see it, that is the new norm.  And, one of the fundamental ways you do this is by improving processes.

But, if the workforce is very lean, running at very high levels of utilization and productivity, how then do you find the bandwidth to do meaningful process improvement activities?  A difficult conundrum, without a doubt?  The old approach (if you consider 2-3 years old!) of setting up a formal top-down initiative (i.e. BPM, Six Sigma, Lean), training a large number of people in one or more problem solving methodologies, and then sending off your new process improvement army to fix stuff is simply not feasible for many organizations.  Even if they want to do this, their people are so busy that there is no bandwidth available, and any kind of a training centric approach like this would likely fail. And, hiring to build a dedicated process improvement organization is just not likely.  So, what is to be done?

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I would argue that the way to do it is to outsource process improvement activities to a partner that specializes in Process Improvement. This is a standard outsourcing value proposition where, instead of building up an internal CI organization, you establish a strong relationship with a specialist partner, and leverage their products/services on an on-demand, as-needed basis.  Fixed overhead now becomes variable cost.  Done well, it’s actually better in that ANY $’s expended on process improvement with your partner should yield a significant ROI.

Does working with this specialist partner mean that internal resources are completely isolated from process improvement activities?  No, of course it doesn’t.  But their involvement shifts to a subject matter expert role, rather than a process engineer.  Key stakeholders are involved every step of the way, from characterizing the current state of the process, to identifying problem root causes, to solution identification and prioritization, to management and control plans.  BUT, they are involved in a way that doesn’t drag them into the weeds and allows them to stay focused on their day job.   Process improvements get done in an efficient and cost effective way, and day to day business activities don’t suffer.   Not bad …

Here at Qualtec, we are already seeing this type of shift happen with many of our clients and have adapted our business model and offerings to accommodate.  AND, we are seeing it work, very well.  So, if you have a real business driver for process improvements, but don’t and will not have internal resources to execute, think seriously about and outsourced approach to process improvement activities.  You may be pleasantly surprised with the results.

Feel free to contact me if you’d like to discuss.

  1. January 4th, 2011 at 17:50 | #1

    I think the trend of approaching improvement this way is picking up, and has always been an option. Yes, it’s going this way because companies are low on people (or are at least less bloated) and maybe also because they are more anxious for timely performance improvement as the economy swings, less able to tolerate risk, are not sufficiently skilled with BPM, and cannot approach it with the requisite CI and change facilitation discipline/context. These factors can apply even if there is an in-house process group. A partner can also help overcome issues associated with business-IT relations and process ownership.

    So why isn’t everybody that needs it doing it? They are unaware or they haven’t found the right partner. When it gets down to it, the partner has to efficiently handle all the aforementioned factors, plus have sufficient domain knowledge to really facilitate and not be an impractical drain on the internal process practitioners. This can all be viewed as part of picking the right partner. Also, realization of the results needs to be carefully addressed – results are predominantly determined by the company, though the best partner helps validate.

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