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BPO honeymoon turns sour Down Under
July 30, 2005 16:48 IST
Is the outsourcing of BPO services from Australia to countries like India ending? It certainly seems so, given that most commercial outfits Down Under are said to be unsatisfied and sceptical about the long-term benefits of outsourcing deals.
This view, according to a survey reported in Australian IT, has prompted a revival of sorts of in-house IT.
Research by Deloitte shows that one in four people questioned have brought IT functions back in-house after realising that these services can be addressed more successfully or at a lower cost using internal resources.
Nearly 50 per cent of the respondents said cost savings did not materialise as a result of outsourcing and 70 per cent had had a 'significant negative' experience.
The mantra in Australian IT and BPO circles is now of exercising caution on outsourcing proposals, the survey concludes.
Nearly half of the study's participants named hidden costs as the most common problem when it came to managing outsourcing projects. About 60 per cent found the outsourced contract required more management effort in comparison to original estimates.
Eighty-one per cent said there was limited or no transparency in a vendor's pricing and cost structure, resulting to additional costs.
In sum total, the Deloitte survey recommends that outsourcing needs to be driven by the 'strategic needs' of the business, rather than as a cost solution.