September 5, 2001—Most companies (89%) are satisfied with their outsourcing supplier, although three out of five have switched suppliers in the last five years.
This is one conclusion from research by law firm Tarlo Lyons, which specialises in technology and outsourcing issues.
In the ‘Outsourcing Survey 2001’, IT systems/IT support (28%) is the most commonly outsourced function. 13% subcontract cleaning. More than half (51%) said that saving money was a key reason for outsourcing and a further 44% that a lack of internal expertise made them outsource.
A number of the participating 71 financial directors—who all work for FTSE 1000 companies—said that outsourcing problems were usually due to a lack of communication with the user and a failure to keep up with the dynamics of the business.
Poor service was the reason 41% of respondents changed suppliers in the last five years. 27% said it was because of the price. However, half of the directors estimated that their organisation spent less than 100,000 annually on outsourcing, while the mean figure was slightly less than 7m (due to a number of companies spending over 100m). Most expected to spend more on outsourcing over the next 12 months.
45% outsourced to between one and three suppliers, although 15% outsourced to more than 20 suppliers. The top criterion when choosing an outsourcing supplier (21%) was an ability to provide a good, efficient, and professional service. Nearly as many (20%) mentioned competitiveness in terms of costs and prices.
—Jessica Jarlvi
Reprinted with permission; copyright 2001 i-FM
