Firms fail to measure outsourcing impact

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.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

Related Topics