Outsourcing, Fail

Businesses fail to make best of outsourcing

21 Jul 2004 | (Survey)

Companies that fail to make major process and operational changes when implementing business process outsourcing could delay payback by up to five years.

According to research by Capgemini, organisations are failing to realise immediate benefits despite the availability of new BPO services and more sophisticated process automation and remote support technologies that can deliver cost savings within just one year.

Capgemini interviewed CFOs, COOs and CEOs from 346 companies across Europe and found that the outsourcing market for administration processes was still maturing in Europe.

Only 10% of European companies are evaluating BPO. Of the companies that do outsource, or are considering outsourcing, the majority (87%) said keeping costs down was the most important reason for outsourcing.

This was followed by improving service delivery (78%), and keeping pace with technological innovation (61%). But Capgemini said that there was still a huge misconception that in-house process automation was a viable alternative to BPO.

In reality, it said, outsourcing gave greater visibility and control back to the company through drawing up contracts with agreed service levels.

Hubert Giraud, global head of BPO at Capgemini, said: "We are concerned that only one in 10 European organisations is considering or evaluating an outsourcing initiative in the next 12 months. More BPO champions are needed on the board to encourage organisations to take a faster and more direct route that will ultimately fuel a more competitive and productive European business environment."

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