November 15, 2004—A Gallup survey of 150 British businesses has found that more than a one third believe their outsourcing strategies have delivered fewer benefits than expected.
The survey, commissioned by Proudfoot Consulting, questioned 925 senior executives in nine countries and six sectors. 15% of the companies said outsourcing had failed and they had brought functions back in-house.
Proudfoot’s European president Jean Thevelin said: “Our survey is further evidence that some firms have rushed into outsourcing, seeing it as some kind of panacea for under-performing business functions. A major trap management falls into is failing to sort out problem departments before outsourcing, leaving the outsourcing provider reaping the real benefits of efficiency and the company effectively giving money away.”
The survey also found that back office processing is significantly more likely to be outsourced by UK firms—11% in the UK firms compared to 6% in the global sample.
Despite that, the UK is one of the countries with the lowest incidence of outsourcing, 44% of the companies questioned relying on in-house solution. Only Australia and Germany go out of house less, with 46% choosing to keep all business functions in-house. The figure in the US is 33% and in South Africa, where firms are most likely to outsource, only 19% retain all functions in-house.
Reprinted with permission; copyright 2004 i-FM
