Underdeveloped Governance can lead to dissatisfaction
The market is maturing and clients are becoming more sophisticated in the way that they contract, yet one outsourcing skill is so underdeveloped it’s putting all outsourcing relationships at risk.
Morgan Chambers has, for the past few years, conducted outsourcing performance studies in many European countries—exploring client satisfaction with their service providers as well as the ability of clients to manage these relationships. The studies are carried out across Europe, with almost 500 C-level or senior managers participating this year alone. They investigate not only HRO contracts but wider BPO and ITO deals.
The results are alarming—clients are dissatisfied with performance. While providers are generally getting the basics right and largely meeting mandated SLAs or simple contract KPIs, this in itself does not contribute to satisfaction.
Only 30 percent of respondents believe they have the requisite skills to manage their service providers, and governance was cited as the main reason for poor relationship performance. It is therefore unsurprising that outsourcing relationships are leaving clients desirous.
Governance within outsourced service contracts is understood to be the key to success or failure. However, the subject of governance is neither commonly understood nor appropriately skilled in most organizations, especially those with the larger and potentially more business-critical contracts.
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- Source: HRO Today and HRO Europe, Monday December 18 2006
- Author: Jemima Fitzgerald