Management
Offshore outsourcing unpopular with customers |
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| Written by Richard Northedge | |
| Monday, 18 June 2007 | |
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Although most outsourcing companies recommend taking business offshore, only a small minority of their customers think this works best, according to accountants PricewaterhouseCoopers.
A study by the firm found increasing differences between what customers and their service providers want and expect. The survey found overall satisfaction with outsourcing: 87 per cent of customers said it delivers the benefits originally projected and 91 per cent, whether happy or not, plan to continue using it. But while 52 per cent of service providers recommended offshore outsourcing, only 20 per cent of customers said this works best. PwC partner Pat McArdle said: “One clear trend from the survey is the frequent disconnect between the needs and expectations of customers and service providers. The rules have changed: the lightening pace of growth in outsourcing is matched only by the transformation of the market as traditional models are gradually being replaced by multi-sourcing, joint-ventures and ‘best of breed’ arrangements.” Managing this extended network of relationships requires more transparency, better communication, greater trust and genuine reciprocity, he said. “In a nutshell, success in this environment will heavily hinge on shifting the relationship between customer and service provider from adversarial to collaborative – from one based on procurement to one grounded in partnership.” The study arose from issues raised by chief executives at the 2007 World Economic Forum in Davos and was based on a survey of outsourcing customers and suppliers in 19 countries. It found customers who collaborate with their outsourcing suppliers gain the most benefits. While IT still accounts for the greatest amount of outsourcing, the survey found it is extending rapidly into production and delivery functions, innovation and R&D, and services. |
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