Outsourcing a failure say UK companies
Over one third (38%) of British companies that have tried outsourcing claim it has been a complete failure or delivered fewer benefits than expected, reports a Gallup survey of 150 British businesses released today by Proudfoot Consulting.
Over half of those polled outsource some part of their business, while 44% of British firms choose to keep all business functions in-house, significantly less than their US counterparts at 33%. The survey of 925 senior executives in nine countries and six sectors, allows comparisons on both a geographical and sector basis. In firms where outsourcing has failed, 15% have brought outsourced functions back in-house. This, says Proudfoot Consulting, shows companies are making major mistakes before they even approach an outsourcing vendor.
"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,? says Jean Thevelin, the firm's European president.
Additional findings in the Proudfoot Consulting survey include:
- Back office processing is significantly more likely to be outsourced by UK firms.