By Doug Hudgeon

The Cost Reduction Tip

Global Supply Chain Group - ddc

In the Eric Carle children’s story, The Mixed Up Chameleon, a chameleon attempts to become the perfect animal by adopting the best parts of different animals e.g. an elephant’s trunk, a giraffe’s long neck etc. At the end of the book, he’s so mixed up that he cannot catch flies for dinner.

Common Cause Of Outsourcing

As obvious as it is that an animal has evolved to work well only as a whole, when companies outsource their back office operations, they often try to keep favoured parts of their current operations.

For example, they may outsource payments but keep their approval processes or outsource claims but keep their task management system.

Common Cause Of Outsourcing Is So Famous, But Why?

This inevitably increases costs and regularly leads to the failure of the entire outsourcing project. Clients aren’t wholly to blame here.

Often outsourcing vendors, to close a sale, will pander to the requests of their clients to create a mixed-up chameleon and not properly recommend that they implement the complete chameleon.

If you are going to outsource a function at the lowest cost with the least change management then you need to find a vendor with a process that you can adopt completely.

Don’t select a vendor based on some other criteria (e.g. they are the market-leader) and ask them to implement only parts of their process

If you cannot find a vendor whose process you can adopt completely then don’t outsource the function.

The Hidden Agenda Of Common Cause Of Outsourcing.

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