MooD International: State Of Relations In Outsourcing report
Is the multi-supplier outsourcing model a ticking time bomb? If clients aren’t getting what they want from a single outsource relationship, how’s it going to work with more than one?
The state of relations between supplier and client within the outsourcing business has been a cause of some concern on both sides of the fence over the last few years.
We wanted to get to the heart of these issues and so commissioned an independent research company to interview 200 senior managers and directors who are responsible for outsourcing in some of the UK’s largest companies.
The findings reveal a large gap between what clients want and expect and what suppliers are delivering, particularly in areas such as transparency, understanding the business model, being trustworthy and innovation. Fundamental flaws in how contracts are agreed and delivered are making it difficult for outsourcers to deliver real value to organisations and are straining relations between client and supplier.
Key findings in the report include:
- On average, clients score their relationships with outsourcers a seven out of 10, this drops to six out of 10 amongst Board members
- 60 per cent think that outsourcers should have the authority to make decisions but only a third give their partners decision-making powers
- 63 per cent think that relaxing controls on decision-making would increase commercial benefits
- Consistent information is important to almost 90 per cent but outsourcers only score a six out of 10 for providing this
- 72 per cent say they evaluate success entirely or mainly on service levels as opposed to business impact, despite half saying ‘business transformation’ or ‘strategic alignment’ is the most critical way they use outsourcing partners
- 29 per cent see the trend moving towards outsourcing the management of multi-suppliers / SIAM
- Only 11 per cent felt extremely confident their organisation has the skills in-house to manage SIAM effectively