Effective management 'crucial' to successful outsourcing

28 August 2009

Businesses should focus on improving their risk management if they are to outsource their operations successfully, it has been suggested.

According to a new report by Gartner, this is one area that firms should target in order to overcome difficulties with managing outsourcing deals and ensuring they meet expectations.

The business and technology research firm found that inflexibility will result in 30 per cent of outsourcing deals being disrupted between now and 2012, with failure by the buyer to complete the process effectively set to be one of the major obstacles.

"Many organizations struggle to develop an effective and efficient sourcing environment, which is necessary to achieve positive sourcing outcomes," research director at Gartner Frank Ridder explained.

He noted that, according to further research by the company, the majority (55 per cent) of firms fail to implement a strategic management layer in their business structure and do not spend enough on developing "critical multisourcing competencies".

As a result, a lot of companies do not have the experience to effectively oversee the outsourcing process and cannot cope with the changes to the decision-making process that alterations in areas such as delivery and acquisition have on the deals they have agreed with their service provider.

Furthermore, the report said, outsourcing deals often leave companies underwhelmed, as a relationship between a provider and a client "frequently promises more than it delivers".

Mr Ridder urged companies to effectively manage all aspects of the outsourcing process, as those that do not "are more likely to experience sourcing inefficiencies caused by misalignment, idle resources [and] unnecessary processes".

In related news in the outsourcing sector, Accenture recently revealed it is reducing its senior executive headcount as it seeks to restructure in the present economic climate.

The company is also looking to reduce its office space to boost efficiency, with the move set to cost the company $247 million before tax in charges.

Written by Written by Tony Aynsley

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