Outsourcing works if key skills are retained inhouse

Nine core capabilities identified

"Skills such as relationship management through senior management attention, contract, structure and refined capabilities can create a 20 to 40 percent difference on service, quality, cost and other performance indicators. If organisations are to benefit from outsourcing, a real change of focus is needed; from activities and assets to leadership, management and appropriate staffing."

LogicaCMG chief executive of global service delivery, Martin Blackburn, said the focus has always been on the benefits of IT outsourcing, with little discussion on what kind of team organizations need to retain to manage their suppliers.

Blackburn said the report highlights that all too often organisations under-invest in building core capabilities due to cost.

"The result is that they miss the chance to pre-empt problems by not having a workforce with the capability to perform at the levels needed to maximise both success and achieve an optimal cost-effective outsourcing arrangement," he said.

In addition to assessing the current IT outsourcing landscape, the paper makes some key predictions for the outsourcing market in the future, especially in the areas of global sourcing, supplier strategies and client developments. Key predictions include the rise in BPO activity overtaking ITO and the increased prevalence of nearshoring.

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