Companies are still failing to attain crucial non-financial benefits in
outsourcing despite 89% of outsourcing activities achieving a return on
investment of more than 25%, new research has found.
2008 outsourcing survey revealed that executives were still missing out on
achieving strategic benefits with only 37% of executives saying a primary driver
in their decision was to improve customer value, and 27% said they hoped to gain
competitive advantage through outsourcing.
Respondents also said they were dissatisfied with their outsourcing
provider’s ability to bring any continuous or significant changes in strategy,
process or use of technology. Dissatisfied executives in the survey noted
underestimated scope, higher-than-expected costs, poor quality communications,
poor service, and poor reporting from their service providers.
The survey found that 64% of executives polled said cost reduction was their
primary motive for their largest outsourcing contract, with access to technology
expertise coming in a close second with 56% of executives citing it.
Peter Moller a partner in the firm’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.’
Just one half of UK practices have implemented a pricing structure around auto enrolment implementation and advice - with many suffering increased costs
Deloitte's north-west Europe foray; BDO, Smith & Williamson investment paths; Shelley Stock Hutter; and Wilkins Kennedy discussed by editor Kevin Reed on our Friday Afternoon Live broadcast
Accountants should alter their perspective on auto-enrolment to maximise business opportunities, according to Eric Clapton.
Kevin Reed discusses whether new accountancy group Cogital can rival the Big Four...and its likely direction of travel