This was one of the findings in a recent BPO white paper by Diamond Management & Technology Consultants. The main reason cited by organizations for abandoning BPO in 2007 was a lack of cost savings. But service providers said that a change of strategic vision or moving functions back in-house were the key reasons for terminations.
A disconnect exists between buyers and providers regarding why organizations are prematurely ending contracts, and this can lead to a lot of finger-pointing, said Tom Weakland, managing partner of Diamond’s global sourcing practice.
Just over half of buyers were satisfied with their BPO initiatives, though there was a wide range of views. Happiest were the organizations which outsourced customer service to onshore providers (64%) and this was predicted as the area with the biggest growth potential in the year ahead. But this was contrasted with only 18% who were happy with an offshored HR function.
BPO has been following in the footsteps of IT outsourcing with customers increasingly using BPO as a competitive weapon and more than just a cost cutting measure, found the report. Already buyers had ranked freed up internal resource and improved efficiency and productivity ahead of cost savings among BPO benefits.