Outsourcing War Stories – ‘Lessons to be Learned’
A Case Study
Mick Furlong, Founding Partner – The Grey Matters Network
A Financial Services Company decided to Outsource back office support/fulfillment processes for some of their consumer product lines to an established offshore provider of services.
The processes being outsourced equated to a significant number of back-office employees. The Decision was driven in part by the need to achieve significant savings and reduce operating costs.
The transition timeline to the new model defined as part of the overall solution was quite aggressive in order to maximise savings.
Within 18 months of the work having been outsourced a significant number of the agreed service levels were failing badly, the quality assurance levels were significantly below agreed levels, additional costs were incurred in adding to onshore capacity to offset the delivery failures and ultimately 40% of the processes were repatriated to the Companies home office within 18 months.
- It is fine to have aggressive savings targets and delivery timescales as long as the appropriate levels of due diligence are performed to ensure the targets are reasonable and achievable – the ultimate responsibility for the due diligence should be subjected to the appropriate levels of governance and not sit with the driver/owner of the solution
- The complexity of the processes – The “tribal knowledge” that is required to deliver some complex services can at times be impossible for Providers to replicate – the due diligence process must include making sure you understand the process complexity and tribal knowledge dependencies and are able to translate it all into specific process instructions for the provider
- The ability of the provider to assimilate the knowledge to deliver the support/fulfillment services must be subject to sufficient levels of due diligence which includes process owners/experts and to the appropriate levels of governance to factor in credible timescales for handover
We have lots more War Stories.
We in the GMn have the experience to help you do things right the first time round.
We in the GMn have walked the walk and understand the importance of due diligence, realistic timelines, and understanding complex processes
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