The team needs to challenge long-standing assumptions. Why do we do the things the way we do them?
The make or buy decision (outsourcing) is frequently a strategy adopted with BPR.
Manufacturing is subcontracted. Organisations often assume that in-house manufacturing is more cost effective than out-sourcing. The BPR argument is that "it is not our business to make things - merely to design, source and sell. Nike or Reebok (sport shoes) now just designs products, places orders with Far-Eastern manufacturers and markets. This type of analysis requires the application of accounting project appraisal techniques e.g. pay-back, internal rate of return analysis etc.
However, sometimes, after closer investigation, if the organisation cannot keep tight enough control over its outsourced processes - it may want to pull the process back in-house. For example a bank may outsource its call centre operations out to the far east but then find that the contractor cannot keep tight enough control over the security of customer data. The bank may need to bring the contract back in-house.
A leading airline might explore whether it should be doing aircraft engineering maintenance itself - after all, car owners take their cars to be serviced at a 3rd party garage - then wwhy not aircraft. however on closer examination of all elements including control and costs - the airline may decide that it is safer to keep it in-house - where there is more flexibility and control.
