Cost second to reliability when it comes to outsourcing

16 June 2015

Non-technical skills are the key to successful outsourcing partnerships, according to research.

The Grant Thornton International Business Report found the intangible aspects of an outsourced relationship, such as a partner's reliability, trust and other 'non-technical' skills, matter most in building successful outsourcing partnerships.

Based on the views of over 2,500 senior business executives in 36 economies around the world, Outsourcing: Beyond technical expertise, looks at the drivers behind good outsourcing relationships.

It found the cost of outsourcing is a secondary consideration at 43 per cent to service reliability which garnered 56 per cent support from the respondents. Trust in the supplier also came as a high priority among 40 per cent of businesses.

In the UK, where the outsourcing market is considered more mature, 'understanding my business' replaced trust in the supplier as the third most important consideration.

Respondents cited communication, at 88 per cent, and quality of the relationship between client and provider, at 87 per cent, as the most critical ingredients in a positive outsourcing experience. The provider's relevant experience was also a major consideration amongst 82 per cent of respondents.

The report found that globally, payroll and HR functions are the most common back-office processes outsourced, with 34 per cent of businesses either currently outsourcing them or planning to do so. In Europe, the UK represents the second largest market where these processes are outsourced, just behind Italy.

Samantha George, head of outsourcing at Grant Thornton UK said companies that outsource expected their providers to have all the specialist skills and IT systems needed to deliver the contracted services.

“The 'softer' and less quantifiable elements of an outsourced relationship are more often the ones that make the most difference,” she said. “As in any relationship, trust and communication remain vital to its success. With outsourcing increasingly on the agenda at international companies, the best providers will have progressed from offering a commoditised service based on price, to truly gaining the confidence of their clients as a strategic partner.”

The report also showed the more mature the outsourcing market, the greater the level of satisfaction experienced by outsourcing clients. In the UK and US respectively, 82 per cent and 80 per cent of businesses have never brought an outsourced service back in-house.

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