Outsourcing provides 25% ROI, says Deloitte

Almost 90% of outsourcing agreements are achieving more than a 25% return on investment (ROI) but companies are failing to get the most out of it, according to Deloitte.

Almost 90% of outsourcing agreements are achieving more than a 25% return on investment (ROI) but companies are failing to get the most out of it, according to Deloitte.

In its Outsourcing Report for 2008 the business consultancy revealed that a massive 89% of outsourcing deals achieved an ROI of more than 25%.

Savings and access to skills were the two main attractions to companies when choosing to outsource.

Cost reduction was cited as the biggest motivation for outsourcing while 56% said access to skills was the main driver.

Only 37% said the reason they outsourced was to improve customer value and only 27% said they hoped to gain competitive advantage through it.

Peter Moller, partner at Deloitte's consulting practice, said, "The true potential of outsourcing is not being achieved and we are still seeing a focus on a narrow remit of labour arbitrage and cost reduction. Overall our survey shows that the emphasis on cost reduction and access to a vendor's skilled workers reveals a procurement-oriented mind set that takes a narrow view of the potential benefits of an outsourcing relationship. In short, companies are aiming too low."

The report also found that 70% of respondents were satisfied or very satisfied with their outsourcing arrangements, which was the highest level in any Deloitte outsourcing study.




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