You are planning to outsource billing operations and you are in a good position. You have analysed all the activities and unit costs and you know that it currently costs €14.00 to issue each monthly bill to a customer. You have shortlisted two suppliers – Supplier A has quoted €8.00 per bill issued and Supplier B has quoted €7.00 per bill issued.
Both have guaranteed service quality and are willing to sign up to punitive service credits, if they fail to meet billing accuracy and quality metrics. You are thinking supplier B is the right choice, but then you call a friend who always has the inside track on these things, and she sends you the following diagram with one condition – you can’t show it to anyone, even your boss.
Now what do you do?