Warwick Business School study, sponsored by Cognizant, reveals European businesses spending more on outsourcers, but need help in measuring the value of innovation they deliver

A study of 250 CIOs and CFOs from Europe’s biggest businesses reveals that C-suite needs help in measuring the innovation delivered by their outsourcing partner. This is despite a strong recognition of the importance of outsourced innovation to their financial performance, and spending on outsourcing higher than at any point in the last three years.

The Warwick Business School research explores the link between outsourcing and innovation among 250 CIOs and CFOs across six regions (the UK, Germany, Switzerland, Benelux, France and the Nordics). It highlights that while the vast majority, 70%, believes that innovation achieved through their outsourced business arrangements contributes to the financial performance of their organisation, only one third (35%) are actually measuring the financial value of the benefits of innovation to their bottom line.

The survey finds that this failure to measure the benefits is against a backdrop of increased reliance on outsourcing-led innovation, with most C-level execs (64%) spending more on outsourcing than three years ago.

Sanjiv Gossain, UK MD, Cognizant, said: "As companies navigate the reset economy, they are investing, wisely, in processes that will be cost-effective and deliver long term benefits. As both outsourcers and clients can attest, modern outsourcing relationships now offer and deliver far, far more than simply cost savings. They can transform the business, achieving greater efficiency, productivity and helping companies maintain that all important competitive edge.

"Today’s research highlights that many businesses are now turning to outsourcers to offer innovation capabilities. As CIOs across the globe are constantly challenged by the board to deliver value by doing things differently, 67% of European CIOs admit to looking to their outsourcing partner to develop ideas into new and improved processes.

"However, today’s findings also indicate many businesses are missing a major opportunity to demonstrate the success that they have accomplished from working with their outsourcing partner by not measuring the benefits achieved or communicating these effectively with the wider teams. We can only conclude that this means money is being wasted by investing in innovation initiatives that are not delivering tangible results. The next steps must be to harness this innovation, by measuring it, communicating the effect it has on a company’s bottom line and growing it."