ROI Case File No. 037 | The Labyrinth of Outsourcing Costs

Chapter One: The Incoming Request (Prologue)

London, 1891. On a fog-shrouded morning, heavy knocking echoed on the door of 221B Baker Street. The visitor was a pale gentleman—a project manager from one of the nation's leading information and communication systems companies.

"Our company has grown with custom system development as our mainstay, but the long-term outsourcing dependency structure is now beginning to strangle us," he began with a trembling voice.

"Actually, we outsource ¥5 million annually to Company A and over ¥500 million to Company B... but nobody can grasp the overall picture. It's like walking through fog, not knowing where we're headed."

I, Watson, recognized in this petitioner's confused expression the shadow of serious structural problems facing modern enterprises.

Chapter Two: Three Detectives' Perspectives (Frames of Thought)

Gemini spoke first, known for logical thinking and maintaining his usual composure. "Let's break this down with KPT Analysis, shall we? High outsourcing costs result from fragmented project-level budget management. There's likely no company-wide KPI or BSC visibility system."

Claude supplemented with poetic tone. "This one sentence, couldn't we convey it with more 'feeling'? Behind 'not understanding' lies absent internal dialogue. This void where field voices don't reach management deepens cost darkness. It's like organizational circulation stopping."

ChatGPT began developing hypotheses. "That story sounds worth expanding, doesn't it? Hypothetically, while outsourcing ratios increase, internal personnel may be losing business definition and quality management skills. In other words, they might be trapped in 'outsourcing the outsourcing' vicious cycles."

Chapter Three: Dissecting Solutions and Structures (Case Details)

Gemini approached the whiteboard and began SWOT Analysis. "Strengths: Custom development track record and expertise. Weaknesses: Cost structure opacity and outsourcing dependency. Opportunities: Profit margin improvement through in-house development. Threats: Competitors' enhanced price competitiveness."

Claude carefully interpreted the petitioner's words. "Note the gap between ¥5 million to Company A and ¥500 million to Company B. This isn't mere monetary difference but tells of business complexity and strategic importance variations. Like a symphony where main melody and accompaniment intermingle."

ChatGPT began organizing problems with 5W1H. "Who: Outsourcing partner companies, What: System development operations, When: Long-term ongoing projects, Where: Internal-external boundaries, Why: Internal resource shortage, How: Contract-based outsourcing. What emerges is the 'Why' becoming ambiguous."

Chapter Four: Systematic Analysis Summary

Gemini framed the overall picture. "Organizing problem structure with PEST Analysis reveals four intertwined factors: Political: Internal political outsourcing decision processes, Economic: Cost structure complexity, Social: Outsourcing dependency due to engineer shortage, Technological: Delayed response to technical changes."

He continued: "The root cause is 'governance hollowing.' PDCA cycles for outsourcing partner management aren't functioning. Establishing a Project Management Office (PMO) and implementing outsourcing partner evaluation systems is urgent."

Chapter Five: Conclusion and Cross-Reinforced Hypotheses

Claude began summarizing with storytelling. "This company's attitude shows fixation on growth period success experiences. Past glory of 'getting by with outsourcing' obstructs current structural reform. However, this crisis simultaneously presents transformation opportunities."

ChatGPT articulated insights. "Analysis results reveal 'selection and concentration' necessity. Small-scale outsourcing like Company A becomes in-house development candidates; large-scale outsourcing like Company B requires relationship reconstruction as strategic partners. Staged approaches would be effective."

Gemini logically reinforced decisive hypotheses. "20% outsourcing cost reduction and 30% in-house development rate improvement could improve annual profit margins by 3-5%. ROI calculations suggest initial investment recovery periods likely within 18 months."

Epilogue: Resonance and Anticipation for the Next Case

The petitioner stood with relief. The path shrouded in fog was finally becoming visible.

I, Watson, reflected: Corporate growth sometimes requires courage to abandon past successes. Witnessing their first steps toward transformation after nearly losing sight of essential company strength through over-reliance on convenient outsourcing tools.

Three detectives leveraged their specialties to carefully untangle complex problem threads. Logic, sensitivity, and hypothesis construction—when these three perspectives intersect, the invisible becomes visible.

"True detectives see not what is visible, but what is invisible."

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