Billions lost through mismanaged outsourcing

25 January 2010

25 January 2010 I Amy Rowe

Businesses are losing billions of pounds every year because of failures in outsourcing telecoms services, a report has revealed.

Poor contract management was to blame for a collective loss of £12 billion for the 81 multinationals surveyed by Forrester Consulting.  

Although technology buyers spent up to 20 per cent of budgets on outsourcing telecoms just one-fifth of their time was allocated to manage the deals, resulting in reduced quality of service.

About 20 per cent of the companies believed they did not meet objectives set out at the start of an outsourcing project. In addition, only 37 per cent of the firms said they had fully defined their telecoms procurement strategy.

The survey, commissioned by telecoms sourcing firm Hudson & Yorke, also found purchasers were struggling to deliver effective services at a low cost.

“Buyers are expected to deliver more services and improved quality at less cost,” said CEO Harry McDermott.

“There is a significant discrepancy between what large organisations hope to achieve with a major telecoms sourcing project and the reality of what is being delivered with limited experience and resources.”

Hudson & Yorke recommended that companies must improve planning and increase resources for outsourcing programmes.

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