Firms fail to measure outsourcing impact
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Businesses are not measuring the financial effects of their own IT outsourcing schemes
Whether outsourcing aids a business in the long term is a hotly debated topic, but many organisations neglect to measure the impact of their own outsourcing projects, according to a report backed by IT and business process outsourcer Cognizant.
The study, conducted by the Warwick Business School, surveyed 250 IT and finance executives from large European organisations. Only 43% of respondents said they had attempted to quantify the financial contribution their outsourcing projects had made.
Among those organisations that had sought to measure that contribution, fewer than 20% said they were ‘very confident’ of their calculations. Only 8% of respondents said they were ‘very confident’ that they knew what their organisation had spent on outsourcing.
Around 40% of the respondents said that their organisation had cut back their use of outsourcing, or slowed the growth of its use. The principal reason for this, as cited by 78% of those respondents, was that they were unclear whether it delivered value for money.
The research also probed the attitudes of CFOs towards their counterparts in IT: only 37% said they were happy with the CIO’s ability to communicate the benefits of outsourcing to the business.
