Dinesh Goel of TPI says "Corporations deciding on a sourcing strategy need to answer the “chicken or the egg” question: what comes first - the fix or the move?" "Fix" here means improve efficiency and effectiveness. "Move" refers to outsourcing. He goes on to propose the following framework for making the decison:
  

It would be interesting to place the fix first /move first dilemma in the context of the larger sourcing problem. What to outsource and what to retain in house is a more fundamental problem. You obviously want your own people to work on the more strategic stuff. But what if your strategic stuff is all messed up and you don't have the skills needed to fix it. You might then opt for a Move (bring in a vendor)-Fix (let him change the model and also empower your people)-Move back(take your baby back and manage it with the newly empowered people) model. In this case you would go in for a transformational partner rather than just someone who can just drive efficiencies. I think of it something like sending your kid to a great boarding school.

To cut a long story short, the whole move-fix/fix-move puzzle needs to be viewed in the larger context of what is strategic to your business, whether your people have the skills needed and what type of a partner to engage to transform the areas that need 'fixing'. Once you have this nailed, you can go on to decide whether to fix first or whether to move first.