The administration and closure this week of Garlands has sent ripples, if not shock waves, through the industry. But who is really to blame, and what lessons can other outsourcers learn.

Clearly, if any company is so heavily reliant on one sector or one client, there is always an element of risk to the business, but risk management is fundamental to any business. The claim that so much of Garlands work moving overseas is the cause of their downfall is a smokescreen, and only masks other issues.

Clients began moving their work up to 18 months ago, not primarily to overseas locations, but often to other outsourcers, and back into their own in-house operations. The reasons were often down to quality, not just cost, and a growing discontentment among many large clients that some outsourcers were becoming complacent, working to their own narrow interests of filling productive hour charging models, rather than working with their clients to adapt and develop new operating models and ways of working fit for the digital age, reducing contact volumes, and improving first time resolution and customer satisfaction.

Clients across the industry are also demanding better working environments and employee engagement from their outsourcers, and to match the investments they have made in their own operations. Does an organisation that in 2010 still deducts money from staff for their own initial training really deserve to be held up as a icon of best practice? And for an organisation that has looked to champion its staff development, announcing their redundancy over the tannoy takes the industry back to dark ages.

The largest clients are very clear about their customer strategy, and know their customers very well. If outsourcers remember this and adapt to meet what their clients need for their own business and their own customers, then this should be contained as an isolated event.

There might be much navel gazing and introspection from many, and crocodile tears in ivory towers from others, but the only real losers in this sorry tale are the thousands of staff left on a full and growing dole queue.

This entry was posted on Wednesday, May 19th, 2010 at 9:24 pm and is filed under The Gait Post. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.