There are some Business Processes, where thinking about collecting Business Intelligence about your Processes, and effecting Continuous Process Improvement makes no sense what so ever!
These are cases when a leapfrogging approach is what is needed, not incremental improvement but radical surgery, change, and Business Transformation!
Sort of like, trying to improve the Horse Drawn Carriage Wheel Design, when cars are mass produced and being sold in thousands!
Technology changes are usually these kinds of game changers and it is better for people charged with Business Process Improvement to keep track of what these are, and try to apply them in their business processes.
Continuous Process Improvement makes sense if incremental changes are the only ones possible. Manufacturing is a very capital intensive activity and drastic wholesale changes may not be possible, most of the time. It is not surprising that companies like GE, Motorola and automobile makers like GM, Ford, Toyota and others apply a lot of process improvement, even if incremental, to their Manufacturing floors.
Many Six Sigma practitioners come from there disciplines and try to apply the same approach to business processes. However discontinuities in how and where business processes are executed may dictate a whole different approach or at least more appropriate ones after a bit more thought about the differences.
If my company is executing a business process, and improving a part of the process by 10% will mean a saving of $X but outsourcing to a low cost country may mean saving $2X, guess what my company would be doing? (During normal times, of course - The current economic downturn, Bank Bailouts and high unemployment in many countries may dictate otherwise!)
This is where Six Sigma, Lean Improvement specialists could come in for criticisms, There is nothing wrong with what these practitioners can contribute and they can contribute big!
It is just that we need to understand the differences between a Manufacturing floor and a Business Process and use appropriate leap frogging improvement efforts when needed and not rely only upon only incremental improvement!
When the music changes, so does the dance. - Proverb
Answering the question: ‘If my company is executing a business process, and improving a part of the process by 10% will mean a saving of $X but outsourcing to a low cost country may mean saving $2X, guess what my company would be doing? ’, I would say – it depends. It depends on the mentality your company has – is it service-oriented or not.
Service-oriented mentality considers that benefits from particular solution have to be steadily gained daily - today, and tomorrow, and day after tomorrow… Talking money, it depends on the period of time you calculate your ROI from the solution. I am not arguing that step-by-step is always more preferable way to deal with BPM changes; as the matter of fact, I do agree with Your points, Nari. However, I am afraid, the arguments are not that straight-forward.
Here is an example. If I consider 4 periods of time where I have to implement 3 serious changes in the BPM and apply in-house changes vs. outsourcing with my current state as a baseline can get following primitive (probably, not correct either) results:
1) having 10% improvement every time (relative to the same baseline) in-house, I can gain $3X of saving
2) having outsourcing, I can get $2X first time and about $0.25X for each second and third changes. Together, it will be $2.5X of saving. Why? Because implementing a change in the outsourced mode in timely and efficient manner is very expensive operation
So, if my strategy is to survive today, I will outsource BPM. Unfortunately, such strategy ends with crash anyway in a short wile because outsourcing model revokes flexibility in change adoption from your company and you will be getting more and more behind the market demands, IMO.
To answer you subject question, the answer is "Never!" Never not think about process improvement, is what I say. I understand your point, yet process improvement comes in many levels, at least, macro and micro. I think you want to hit the macro level first, like global strategies, before tackling the re-design of the shop floor.
Get the big picture first, yet NEVER give up on process improvement.