Almost all of outsourcing engagements use SOPs in some form or fashion. This was how knowledge was instilled for repetitive tasks that we’re outsourced.  The clients SME often those very same folks whose jobs were outsourced wrote these in great detail to ensure work gets done in outsourced environments.

Let’s understand the definition

Standard Operating Procedure (SOP) is a set of written instructions that document a routine or repetitive activity followed by an organization. … This document is designed to provide guidance in the preparation and use of an SOP within a quality system.

An SOP should be written as soon as the need for a standard written procedure is identified. SOPs should be formally reviewed every two years unless changes in process happens for what ever reason ranging from optimization to statutory / legal etc.

There has been a great debate about replacing SOPs with process maps, the  PMs are visual and more easily readable.   I have always looked at this in terms of the policy, procedures, work instructions.  The SOP’s are procedures and typically written at a level of detail which do not get into the task details.  With this, I find that having a process map (either process flow or functional deployment/swim lane) work well as an appendix or even a cover page to the SOP.  I would never replace on with another as they are complimentary to each other. The work instructions which get into more detail would then also have a more detailed process map.

Process maps tend to show process inefficiencies and can easily help reduce them or optimize using proven techniques like Six sigma etc. SOPs even when well documented are stand alone documented at process level often difficult to comprehend where optimization can happen more so when clients look at opportunities to cut down cycle time or optimize process to reduce labor costs.

Process maps tend to offer more advantages over SOPs in situations where you want to adopt a lean approach with Six Sigma techniques.

With the advent to Machine Learning, Robotic Process Automation it is preferably nice to have process maps that will help to accelerate some of these initiatives.

In the digital age SOPs seem like a legacy document – While we cannot dismiss the SOP totally it would be advisable to evolve towards linking them with Process Maps to be more meaningful and be amenable to other initiatives mentioned here.

Also these documents should be reviewed and shared with technology or business teams that own the process of and when they impact these process areas to ensure it remains up to date and relevant.  A periodic review or as and when a particular process changes impacting an SOP should be kept in mind to keep these upto date.

Lastly these are not literally IP of the clients,  own them.

Many successful outsourcing engagements have settled into comfortable relationships, some going on for decades now, renewing at times the same contracts with few tweaks. Having proven their ability over time, service providers are looked upon as long-term partners. Familiar with a company’s core business and culture, providers are now offering clients management consulting process improvement services. Similarly, companies are asking for more provider capability: Can they take on higher-skill processes? Can they handle both the back office and the front office?

While the service providers are often looking to cross sell and up-sell, some engagements have lagged behind in offering value.  Depending on how engagements are structured the service levels are impacted for good or for worse, Recently I came across an engagement structure that moved from T&M with a rate card to guaranteed minimum per year for a basket of services. The immediate impact after moving into this structure was clearly visible. The service providers gradually downscale the top talents who were obviously paid more and moved in bunch of new recruits and also moved out key people with prized visas from onsite to other clients thus impacting the performance.

As companies go digital and scout for right talent to take them into the next level of automation be it Machine learning, Robotic Process Automation, Block Chain – just to name a few, they need to be more diligent with picking the right partners and not hesitate to bring back or move to other providers that are more capable to take their partnerships to next levels.  After all partnerships are the key to progress.  Long term engagements are giving way to short and medium term with focus on outcomes.

The days of ten year deals are nearing to an end, that is too long term given the way technology innovations are taking shape.  Getting locked in has its consequences.  Its not cost arbitrate that is weighing in on C-Suite, its capability Vs. Ability.  Over the last couple of years, more and more companies are looking at their outsourcing engagements closely to re-shape their combined futures.  Rightfully so, this is the right time to review and take remedial action.