A recent document released last week, Deloitte Consulting has come out harshly about Outsourcing and has stated specifically that ?In the real world, outsourcing frequently fails to deliver on its promise.? Furthermore, Deloitte Consulting stated that ?Rising negative sentiment in the media, analysis of a sample of 50 problem deals, and other surveys prove that the tide is turning in the outsourcing market.?
One of the points that are made in the whitepaper is that companies used outsourcing as a cost-saving strategy during the recession, and are still using this now as a way to continually cut costs, however, the study is calling into question the benefits of outsourcing today. ?In today?s economy and labor market, organizations looking for differentiated growth solutions should avoid outsourcing when based solely on cost savings.? Adding to the report; ?An unfavorable mix of rising costs and increased demand will drive up the cost of outsourcing for organizations and vendors.?
The survey shows that 20 percent of outsourcing relationships fail within the first two years and fifty percent within 5 years, according to Dun and Bradstreet.
The report ?Calling a Change in the Outsourcing Market: The realities for the World?s Largest Organizations? Dates April 2005 is available at http://www.deloitte.com/dtt/cda/doc/content/us_outsourcing_callingachange.pdf.