Equaterra Finds Link Between Outsourcing Investment and Satisfaction

May 24, 2006 (PLANSPONSOR.com) - A new study suggests that there is a direct connection between how much companies invest in outsourcing management and governance functions and their level of satisfaction.

EquaTerra, which offers outsourcing advice, defines outsourcing management and governance (OM/G) functions as the personnel, processes, software and tools, and external services (e.g., advisors, lawyers and auditors) required for outsourcing success, according to a release.

Key findings of the study include:

  • Outsourcing satisfaction improves over time. The highest levels of satisfaction were with IT and CRM executives.                                              
  • While satisfaction was greatest for companies that spend 4% to 7% on OM/G, over 48% of respondents spend between 1% to 4%. HR executives were the least satisfied at the 1% to 4% spending level.
  • Executives who outsourced for process improvement versus cost savings tended to be more satisfied.
  • High-Tech Products & Services, Pharmaceuticals and Automotive/Manufacturing were more satisfied than other industries.

The study found that the spending on OM/G breaks down as:

  • OM/G Personnel – 41%
  • OM/G Software/Tools – 32%
  • External services supporting OM/G – 29% (includes advisors, lawyers, auditors, etc.)

EquaTerra found that organizations care most about getting an OM/G tool that delivers timely, relevant and actionable data, the release said.