Firm hailed as pioneer of what analysts are calling recursive efficiency
A Bengaluru based business process outsourcing firm has received a prestigious national industry award this week after successfully outsourcing its own outsourcing division to a third party vendor, a manoeuvre judges described in the official citation as a genuinely new frontier in operational efficiency.
A Company That Outsourced Its Way to the Top
The firm, which handles customer service contracts for several multinational retail and telecom clients, announced earlier this year that its internal vendor management team, the department responsible for finding and negotiating with outsourcing partners, would itself be outsourced to a specialist consultancy based two floors below in the same office building. Executives described the move at the time as a natural evolution of the company’s core competency, which is, according to its own investor materials, efficiently managing the management of efficiency.
When the award committee first reviewed our submission, they assumed there had been a clerical error, the company’s chief operating officer said at the ceremony, to warm applause from an audience largely composed of consultants representing other consultants. But once they understood that we had genuinely found a way to make our outsourcing more outsourced, they recognised it as the logical endpoint of the entire industry.
Efficiency Gains, on Paper at Least
Internal figures presented at the award ceremony claim the restructuring reduced overhead costs by an unspecified but reportedly impressive margin, largely by eliminating an internal team and replacing it with an external one that occupies the same desks, uses the same email addresses, and, according to two employees who spoke on condition of anonymity, appears to be composed of several of the same people wearing different lanyards.
Business analysts covering the award noted that the outsourcing sector, long a cornerstone of the Indian services economy and a frequent subject of coverage in outlets like the Hindu, has increasingly turned inward for growth opportunities as international competition intensifies. One analyst described the firm’s strategy as proof that when an industry runs out of external functions to outsource, it will, with impressive creativity, begin outsourcing itself, layer by layer, indefinitely.
How the Deal Actually Works
Under the arrangement, the newly external vendor management team continues to report, functionally, to the same senior leadership it always did, but now does so through a formal service level agreement rather than an internal reporting line, a change the company says has improved accountability considerably, since missed deadlines now technically constitute a contract breach rather than simply an awkward internal conversation. The consultancy handling the outsourced function, itself a subsidiary the parent company holds a minority stake in, has reportedly hired two additional staff to manage what it describes internally as vendor relations with its primary client, a client that happens to be its own parent organisation.
A junior analyst within the newly formed consultancy, speaking on condition of anonymity, said the arrangement had mostly meant learning a new set of email signatures and adjusting to slightly more formal language in meetings that had previously been conducted, in her words, in flip flops. She added that invoices are now generated and processed between the two entities on a monthly basis, a paperwork cycle she estimated consumes roughly the same amount of staff time the restructuring was originally meant to save.
Judges Defend the Award
The award committee, made up largely of senior figures from the business process outsourcing industry itself, defended its decision in a statement, arguing that innovation should be recognised wherever it appears, even when, as one judge put it privately, it appears to be mostly a company talking to a slightly different version of itself with better letterhead. The committee’s official citation praised the firm for, in its words, demonstrating the full expressive potential of the outsourcing model, a phrase several attendees at the ceremony admitted they were still trying to fully parse by the time the dinner course arrived.
The firm says it plans to submit next year’s award entry based on early results from the arrangement, assuming the relevant report is completed on time by whichever team currently holds responsibility for reporting.
Where Does It End
Asked whether the newly outsourced vendor management team might itself eventually outsource its own oversight function, the chief operating officer paused for what witnesses described as a notably long moment before confirming that discussions were, in fact, already underway with a firm specialising in exactly that. He declined to name the firm, citing a nondisclosure agreement that, he added, had itself been drafted by an outsourced legal team.
Employees within the restructured department report that day to day operations have changed remarkably little, aside from a new dress code requiring branded lanyards from the external vendor and a slightly longer commute for two staff members who now must travel to the second floor rather than simply walking across the open plan office they previously shared with the department that now technically employs them.
The award, presented annually to firms demonstrating exceptional innovation in business process management, has previously gone to companies specialising in supply chain automation and, memorably, to a logistics firm that automated its own automation review board. Industry insiders say this year’s winner has set a new benchmark that few competitors are eager, or perhaps equipped, to match.
Bohiney.com will continue tracking the outsourcing sector’s recursive turn, assuming its own coverage team is not, at some point, outsourced to cover itself.
SOURCE: https://bohiney.com