Outsourcing Satisfaction Levels Dependent Upon Resources, Length of Relationship
A study from a multinational outsourcing firm found a direct correlation between the investment organizations make in outsourcing management and governance and the level of satisfaction derived from the arrangement.
A study from a multinational outsourcing firm found a direct correlation between the investment organizations make in outsourcing management and governance and the level of satisfaction derived from the arrangement.
The study, conducted by Equaterra, included more than 250 information technology and business process outsourcing decision-makers. Although the study didn’t focus on facility outsourcing, the finding could have parallels.
The study found that the more resources, including personnel, software and advisory and legal services, that an organization put behind its outsourcing effort, the more likely they were to be please with the outcome.
Other findings include:
- Outsourcing satisfaction improves over time. Respondents whose engagements had been in place more than two years were consistently more satisfied.
- While satisfaction was greatest for companies that spend 4 to 7 percent on managing outsourcing arrangements, more than 48 percent of respondents spend between 1 to 4 percent; human resource executives were the least satisfied at this one to four percent spend-level.
- Executives who outsourced for process improvement versus cost savings tended to be more satisfied.
- Industries more satisfied with outsourcing than the norm included high-tech, pharmaceutical and automotive manufacturing industries
Additionally, the study assessed the components of outsourcing management capabilities that respondents viewed as most important to the success of their outsourcing engagements. Service quality was the most important and communication capabilities ranked least important. Yet, further detail revealed that information technology executives, arguably with the longest success with outsourcing, cited communication management as the most important functionality in OM/G tools.
The study also found that organizations were using a wide range of software tools to support outsourcing efforts. There was no clear consensus on which software applications or class of software vendors has the most compelling tools. However, organizations clearly identified that value for the money and ease of use are the key desired functional attributes of a quality management tool, and that providing timely, relevant and actionable data was the more important deliverable from the tool.
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