Furrowed brows in outsourcing circles this week, as industry analysts Gartner have issued a report predicting no less than half (check that - half) of all Business Process Outsourcing or BPO deals will be in trouble within 3 years. Read one of the available articles here.
The outsourcing market is generally thought to be booming, so why the doom and gloom? The answer is apparently simple - suppliers of BPO services are it seems "over-hyping" their offerings, and this will lead to customer disillusionment and maybe even formal disputes further down the line when reality bites.
I'm reluctant to contradict the experts, but can this really be it ? Certainly, the outsourcing marketplace is patrolled by some very large and sophisticated service providers fielding teams of highly-skilled sales staff on incentive-led packages. Surely though, they are not always selling to gullible, trusting types, but often large customer businesses with experienced staff of their own who are used to handling large budgets, and these businesses didn't get that way by accident. Maybe the customers need to look at their own behaviour too.
there is a lot of anecdotal evidence that customers have if anything got more tough and more savvy in recent years, and are adopting increasingly sophisticated approaches to securing maximum benefit from BPO providers for minimum cost. Even the public sector, traditionally painted as the "soft target" for the outsourcing giants, has seen customers trying more and more to outsource risk and liability while retaining a stranglehold on day to day control to sometimes micro-management levels. This must reflect warped expectations on the customer side, which cannot lay firm foundations for a rewarding and fruitful relationship over the long haul.
So come on, fair's fair - maybe we need to look at both sides of the deal.
Yes I'm generalising, but let's remember where we came in - if half the deals being made are heading for trouble, there must be some pretty general forces at work.