Over a third of organisations say they are unhappy with their outsourcing provider

25th October 2012

A recent live poll taken by SSON at SSOWeek in Orlando, illustrates that over a third of organisations say they are unhappy with their outsourcing provider.  Delegates made up of 850+ shared services and outsourcing professionals (65% buyside) took part in a poll designed to discover more about their SSO (Shared Service Outsourcing) organisation and where they are in their outsourcing journey.   FSN writer Michelle Simon looks at the survey.

 

 

 

Over the past 15 years, shared services organisations have grown in popularity, to the point where they are now the ‘standard’ approach for the way large companies manage general and administrative functions.  The poll highlighted that 87% of organisations are now engaged with a shared service centre.  Shared services offer the potential to improve service quality and effectiveness and with defined service level agreements they can increase efficiency in transactional processing and ultimately reduce costs. However, it appears that the journey for many is only just beginning with 55% looking to increase their focus on BPO (Business Process Outsourcing), whilst over a third are not happy with their current outsource providers.

A major challenge facing 37% of organisations is the ability to grow the service, expanding to new business units and adding new services.  Although this is the biggest obstacle for organisations it appears to be an integral part of the outsourcing journey, with 46% of organisations citing their intention to achieve a multi-function shared services centre or multiple global service centre.

Expanding shared services to incorporate more functions is high on organisations’ agenda but an overwhelming majority, 44% thought that BPO is most suited to the finance and accounting functions, including payroll.  Despite this, in recent years some shared service centres have evolved, moving up the value chain offering services to provide organisations with valuable insights through the use of business analytics.  Although few organisations appear to have capitalised on this transition, with only 9% of the polled audience claiming to use a shared services business analytics team.

While some organisations have already made the bold move to obtain business analytics via shared services, 32% of those polled are yet to climb the first rung of the ladder and choose an analytic engine.   33% of the organisations cited the key barrier to employing business analytics is gaining access to enterprise data and an additional 25% point to other organisational priorities.  Though enterprises recognise the importance of developing their business analytics to improve their day-to-day decision making, guide future organisational strategies and visualise data through new perspectives.

While some are looking to grow their outsourced operations yet further, many are still trying to overcome some of the initial hurdles, with 26% still needing to undergo a period of transformation and change management.  An additional 16% are still trying to leverage cost savings, a major incentive for engaging in SSO in the first instance.  In order to elevate the shared services to world class levels 46% of respondents feel that technology improvements and innovations are required, whilst 22% of organisations highlight the need to move to best practice processes and a further 16% think the business would need to realign its priorities.

Despite some organisations facing a number of hurdles in attaining world class shared services 75% of the respondents have seen their shared services operations grow.  21% saw their operation expand by over a quarter in the last 18 months and this trend is likely to continue.  

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