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Outsourcing: Beyond technical expertise

The outsourcing of back-office processes is now a well entrenched business practice at companies around the world. Approximately two out of every five businesses use it as an important means to reduce costs, improve efficiencies and, in many cases, ensure compliance.

Last year’s report (Outsourcing: driving efficiency and growth) identified the main reasons why companies of different sizes and in different regions choose to outsource back-office business processes – and why they do not. This year’s report, based on a survey of 2,571 business executives in 36 economies around the world, explores what companies look for in their outsourcing relationships. It also seeks to understand the reasons companies bring outsourced services back in-house.

For companies already outsourcing, or planning to do so, the striking importance of intangible factors in making a relationship work raises new implications. Any due diligence being conducted needs to consider softer skills, and the fit from a relationships perspective, as well as the traditional procurement factors of costs and service level agreements.

For outsourcing providers, there is a clear need to invest in these intangible aspects. These can often be overlooked, but are clearly highly valued by businesses.

Finally we offer six recommendations for providers and their clients to help improve outsourcing relationships.