When Outsourcing is Wrong

Businesses tend to stick with activities that have more return on investment (ROI).

To elaborate the end-to-end value creation process for most product or service based businesses, I’ve classified the activities following stages:

  • Procurement
  • Creation
  • Quality
  • Marketing
  • Sales
  • Customer service

Now that we are on the same page, let me give you an example.

A friend of mine recently shared information about a case where ROI was viewed as top-down (high-priority – procurement and low-priority – customer service).

In this case, a low-cost airline company, saw least ROI in customer service.

Eventually, they outsourced it to a PR firm.

What’s interesting is, the PR firm exhausted maximum time in apologising to the customers of airline company.

One can conclude that custom service (or bottom-up approach) was not a priority.

So, which can be given priority? – Top-down or bottom-up approach?

One reply on “When Outsourcing is Wrong”

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