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Only 22% of the 157 organisations questioned by outsourcing advisory firm Morgan Chambers said they felt that their supplier had "totally delivered" to their expectations regarding service level agreements.
When asked whether their service provider identified new opportunities to reduce costs - one of the main attractions of outsourcing - 61% of organisations said suppliers had failed to deliver.
Despite this dissatisfaction, only 26% of respondents used a benchmarked service to judge the performance of their outsourcing supplier.
"The UK outsourcing market prides itself on being one of the most developed in the world but many of the household names are fundamentally failing to generate positive reactions among the user community," said the report.
The report also warned that UK users would switch their business to offshore outsourcing suppliers unless traditional suppliers improved their performance.
On a more positive note, all of the users questioned felt that suppliers understood their business and expressed "high levels" of satisfaction with business process outsourcing deals.
Free copy of the report www.morgan-chambers.com