One line of thinking goes that outsourcing would be a natural choice during the downturn as companies seek to tackle costly and often inefficient functions. But while it’s well-recognised that this is far too simplified a view, it’s safe to say that, as yet, the outsourcing market hasn’t witnessed the jump in 2010 that many were predicting. Yet it's not obvious why that is.

In a recent analysis piece, Procurement Leaders looked at some of the reasons that might be – companies minimising risk exposure, lessening large-scale projects – and reaches the conclusion that the outsourcing industry, ambitious though it is, has work to do.

For those that keep up with some of the excellent industry blogs around, there’s a clear mountain of very smart people who are reconsidering what outsourcing can do and it seems that there’s still a large degree of education to be done around how outsourcing should be treated.

If, for example, CIOs are increasingly focusing on cost optimisation and regarding risk and compliance measures as crucial to their organisation, as a recent study indicated, that says something about what they will be looking for in outsourcing.

Likewise BPO, the gap between the perceived areas where innovation is a possible outcome of an outsourcing relationship and the reality being achieved at the moment is still surprisingly wide. Again, for all the bold examples of companies that take the ‘if it isn’t what we do, we give it to someone else to do’ approach, there’s still a huge amount  in the current climate that don’t have the mindset to take those risks.

To what extent it’s the outsourcing market that needs to develop and to what extent it’s the businesses which need to have a clearer idea of what they should be getting from an outsourcing relationship and what governance structures they need to have in place to do so is an interesting question.

But procurement can certainly be at the heart of that. Outsourcing isn’t always procurement’s domain, but few are as well positioned as the CPO to demonstrate what exactly outsourcing can and should offer. Perhaps it's time to ask vendors some probing questions.  

Steve Hall is senior staff writer of Procurement Leaders. To find out more about the magazine, click here.