A survey by law firm Denton Wilde Sapte has found that a
noticeable majority of outsourcing deals, 66%, fail to deliver the
benefits promised.
The report comes at a time when it is estimated that nine out of 10
companies outsource some aspect of their business, typically IT
support or call centre functions.
Despite cost reduction being the prime motivator for outsourcing,
the 100 survey respondents cited higher costs as the chief
disadvantage of outsourcing. A commanding 72% of companies were
worried about the flexibility of their contract.
“This should provide a wake-up call to outsourcing service
suppliers,” says the head of the firm’s technology, media &
telecoms sector John Worthy.
“Customer expectations would be better met by shifting the focus of
outsourcing deals towards more business-oriented key performance
indicators, and ensuring that the deal supports the business
relationship effectively.”
A separate IDC survey shows that a number of smaller, specialist
outsourcers are challenging the big players with competitive
pricing and technology in niche areas.
Companies such as Dell, specialising in desktop management, and
Lucent Technologies with its network management expertise are
winning customers.
Salesforce.com, which exploits the internet to deliver hosted
applications is also gaining ground, together with internet
powerhouses Google, AOL, Amazon.com and others delving into
“on-demand” business services.