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 Some guidelines on outsourcing … 
Outsourcing is a normal business practice – it makes sense, provided you choose carefully ...

In 2002 Michael F. Corbett & Associates estimated the global outsourcing spend at 4.44 Trillion US$, over double that of 1998, and projected 5.10 Trillion US$ for 2003.

Of this, global outsourced spending by companies with turnover below 12 Million UK£ will rise from 225 Billion UK£ in 2002 to 305 Billion UK£ in 2003

Remember - successful outsourcing relies on 3 key factors
— The need to specify as completely and realistically as possible the scope and purpose of the outsourced activity
— The need to measure the activity and associated costs as accurately as possible in an ongoing way that allows the benefit to be measurable to both parties
— The need to build in quality feedback processes and reward / penalty schemes to at least maintain and preferably drive standards higher long-term

However, Dun & Bradstreet’s ‘Barometer of Global Outsourcing’ reports that 20-25% of all outsourcing relationships will fail in any 2-year period, and 50% within 5 years.

 

“… 70% of survey respondents noted that their outsourcing supplier ‘didn’t understand what they were supposed to do’ and ‘the cost was too high and they provided poor service’”.

(Source: Dun & Bradstreet ‘Barometer of Global Outsourcing’ as reported in Internet Works)

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