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Top 500 global corporations lose £12 billion annually due to sourcing failures

Study reveals widespread dissatisfaction amongst large enterprises with telecom and network sourcing projects

GENERAL MERCHANDISE

Top 500 global corporations lose £12 billion annually due to sourcing failures

Large enterprises globally are losing £12 billion annually through failures in the sourcing and governance of their telecom services, according to a study conducted by Forrester Consulting on behalf of Hudson & Yorke, specialists in telecommunications and network sourcing. These losses are due to 80% of all telecoms sourcing projects not being as efficient as they could be, with larger retailers potentially able to save 20% on each contract spend.

The independent study surveyed 81 multinational corporations from 12 countries and a variety of industries, including retail. The findings quantify how adoption of best practice in telecoms sourcing can result in increased efficiencies, reduced costs and improved service levels.

The key findings, which are a stark warning to business leaders within the retail sector, include:
Staff shortcuts
o While CIOs are spending up to 20% of IT budgets on telecom services, they are committing well under one fifth of team time to managing their telecom strategy, sourcing and governance, resulting in financial loss and reduced quality of service from telecom service providers

Short-sighted strategy
o While nearly three quarters of respondents (74%) had considered their total cost of ownership and current contracts in detail, only half that number felt they had thoroughly defined their telecoms sourcing strategy, demonstrating a lack of consistency

o At the end of a major sourcing project, one in five of respondents felt they were not satisfied that they had met the objectives set out in the original business case for the investment

Harry McDermott, CEO at Hudson & Yorke, comments: “CIOs in the retail sector are increasingly expected by their CEOs and CFOs to deliver more services and improved quality at less cost. There is clearly a significant discrepancy between what large organisations hope to achieve with a major telecoms sourcing project, and the reality of what is currently being delivered with limited experience and resources.”

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