End users see ignorance as biggest block to outsourcing

Outsourcing suppliers which are ignorant about a user’s business and their processes have been cited as the chief reasons businesses reject business process outsourcing (BPO).

Most financial services companies and manufacturers believe that outsourcing suppliers fail to understand their business processes, according to a survey of 100 businesses by the National Outsourcing Association (NOA).

Some 67% of the companies surveyed said that potential business process outsourcing suppliers failed to demonstrate detailed knowledge of their business models.

Research firm Nelson Hall asked sourcing managers at all 100 companies what were the main obstacles to outsourcing at their businesses.

Although companies criticised suppliers for failing to understand their individual business processes, the same companies believed that legal protection was more important than knowledge of business processes in their industries when choosing an outsourcing location.

Some 89% of companies said legal protection was an important factor when choosing a location, compared with 88 companies that said power was important and 63 that talked about knowledge of their industry’s business processes.

The survey found that the big Asian economies were more attractive outsourcing locations than Eastern Europe or Latin America.

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