Anonymous

Midlands

IT Developer

I've seen many examples of outsourcing over the years - perhaps the biggest was BT outsourcing its excellent in-house catering.
And guess what? It never works out quite like the promises made about it.
Common sense should tell us that if it costs a £1 to do something, then it will cost the outsourcer a £1 also. Then he adds his profit. To make it atttractive, he charges 80p, and skimps like mad to get his costs down from £1 to 60p so he makes a profit. This can only happen when the the new provider handles many contracts, and can benefit from economies of scale. In my experience this rarely happens - take the catering I mentioned earlier: It was handled by a central HQ, but the diverse locations served prevented bulk purchase of goods, so the raw materials still cost the same. The labour costs were about similar, so in the end the prices to the customers went up (and the quality went down). Who benefitted? The new supplier, of course. We didn't. BT didn't. But someone signed the contract, just the same.