Top European users question the value of small scale outsourcing

The largest businesses in Europe now have multiple outsourcing deals but are worried about their ability to make rival suppliers...

The largest businesses in Europe now have multiple outsourcing deals but are worried about their ability to make rival suppliers accountable for delivering interlinked services, a new survey has found.

In a survey comprising the top 250 European companies, respondents said they were concerned about the ability of suppliers to deliver separate parts of the same or inter-dependent services, such as a helpdesk or network. Companies were also concerned which of the multiple suppliers they used would take responsibility if they encountered a problem with an outsourced service.

The main reason given by respondents for outsourcing was to reduce and control costs (70%). However, outsourcing deals were also expected to boost a company’s business performance, rather than simply trim IT running costs, the survey by IT services company Computer Sciences Corporation found.

Companies cited a reduction of costs, an improvement in the quality of a service and using standard technology as areas of outsourcing they were most content with.

But they were least satisfied with their ability to "gain access to world class skills and expertise" through an outsourcing deal and sharing risks and rewards with suppliers.

Alex Mayall, managing director of CSC’s research and advisory services business unit, said using multiple suppliers reduces the disruption caused if one supplier goes out of business but has other drawbacks.

"The downside is having to deal with multiple suppliers [and making them accountable]," said Mayall. "When things go wrong companies want to hang someone out to dry and hold someone accountable. But when you have multiple suppliers in a chain of services this is notoriously difficult to do."

One way for user organisations to deal with this problem is to make one supplier a prime contractor for the delivery of a service and the performance of different suppliers, he added.

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