PracticeConsultingCold shoulder for UK outsourcers

Cold shoulder for UK outsourcers

The UK's biggest companies have only lukewarm relationships with their outsourcing providers despite signing long-term contracts, according to a new survey.

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Just 15% of businesses felt they were in a ‘professional and engaged’ relationship with their outsourcing partner, while 72% found the experience to be merely ‘adequate’.

The vast majority of businesses that outsource key functions have entered into lengthy contracts with their providers. More than three-quarters (82%) of the 157 companies surveyed have agreements in place for longer than a year and 35% are in place for more than five. But despite the long-term nature of the deals, experiences with outsourcing service providers are a mixed bag.

Not one company described the relationship with their outsourcing partner as ‘adversarial’, but 13% said their experience was ‘problematic’.

The survey, conducted by outsourcing advisory consultants Morgan Chambers, included 51 FTSE100 companies and asked their opinions of UK outsourcers.

More than half the respondents said that large technological and business changes were the main drivers for seeking outsourcing service providers, while a fifth cited mergers & acquisitions and disposals as the second most popular reason.

An impressive 79% of companies said outsourcers had delivered to the terms of their service level agreements, with 21% dissatisfied with the technical delivery as measured within the contract.

Despite the high level of SLA satisfaction, only 22% thought their provider had ‘totally delivered’ to expectation.

Morgan Chambers argued that meeting SLA is a ‘basic client expectation’, and there is a need for outsourcers to show value elsewhere.

Not one outsourcer ‘actively’ managed the relationship with their client.

Less than one-half of service providers suggested cost saving initiatives to their clients – 61% of respondents believed this aspect of their relationship to be a ‘failure’. Only 5% of respondents said their service providers helped identify cost savings.

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