07.24.07
Fixing Broken Processes
In an article appearing in Computer World on July 23, 2007 entitled “When to Fix a Broken Process,†Bart Perkins of Leverage Partners, Inc., explores a question that many ask – whether it is better to improve your process before or after you outsource. Mr. Perkins aptly points out that there are pros and cons to each approach – and that the ultimate answer, in large part, depends on the state of the customer at the time of the outsourcing.
I do think that it is important to look at the reasons why the process is “broken†in the first place and, for those championing outsourcing deals, to understand, with a healthy dose of realism, what characteristics led to the breakdown.
Frequently, a broken process is simply too old to be fixed. Old legacy IT systems, maintained for over twenty, are the classic example. While these may be able to be “fixed†with Herculean efforts (and Titanic expense), they may just be too broken to make it worth the trouble.
Other times, an organization changes too rapidly – through multiple reorganizations, management reshuffles, etc. While many say that “change is the only constant,†too often organizations change for the sake of change. Organizational behavior that encourages internal instability also encourages self-preserving behavior amongst middle-level managers and technologists – and, therefore, inflexible, arcane and, ultimately “broken†processes.
Both of the above scenarios seem ready candidates for outsourcing the solution. While that approach often makes sense, it is not without risks. The most significant, in either case, is the difficulty that the vendor will have in divining the appropriate business rules from the broken processes. In the first instance, the detail-level rules will be tied up in code that is likely poorly documented, patched repeatedly and subject to unknown manual workarounds. Detail-level knowledge may not exist within the company at all, and solutioning without in-house expertise may be nearly impossible.
In the second instance, gathering business rules from employees facing an inevitable reduction-in-force may prove difficult, at best. Furthermore, job-saving incentives may encourage behavior that further obfuscates the business rules, making the outsourced vendor’s job more difficult and costly.
On the other hand, some processes are broken simply because management has failed to invest in its processes and its people. These broken processes languish from insufficient resources, lack of institutional commitment and weak planning.
Still others become “broken†because the customer changes. New products are created and old ones discontinued. Companies go through major organizational changes (merger/acquisition, bankruptcy, etc.). Processes no longer fit the business – and therefore become “broken.â€
In these two cases, investments in internal solutioning seem like obvious solutions. In the first instance, what could be better than finally investing in your people? It is an obvious and apparently enlightened solution. However, an organization that systematically under-invests in its people has likely already lost its best-and-brightest – and the remaining skill set may be insufficient to successfully fix the process.
In the second instance, major corporate changes are often the cause of fear, instability and self-protective behavior. One way to overcome this is to invest in its people – and give them a big solutioning project. While this may calm certain fears, it also sets the stage for turf battles at all levels. In this instance, going outside, for both perspective and impartiality, may offer the better solution.
The scenarios are just a few examples of the considerations that should go into the decision to fix a broken process before or after an outsourcing. An impartial consideration of both sides of the question is critical, and decisions should be tested carefully within the organization before selecting one approach over the other.
It is also important to remember that your vendor likely cannot work miracles (I’ll hear from the vendor community on this one). A “broken†process may, in fact, be impossible to fix – and may require replacement. Depending on the centrality of the broken process, replacement, itself, may prove costly, painful and disruptive. However, it may be necessary. Knowing, and understanding fully, the decision making process, and the pros and cons of each approach, will help a customer through these very difficult times.
