Outsourcing is back in vogue with new research showing that two thirds of European CIOs and CFOs are spending more on outsourcing partnerships than three years ago.

Sixty-four per cent of C-level executives are spending more on partnerships in this ‘Reset Economy’.

Research conducted by Warwick Business School and Cognizant showed that 70 per cent of those questioned believe the innovation that is achieved through outsourcing contributes to their organisation’s financial performance – although only 35 per cent measure the innovation that is delivered.

Sixty-six per cent said they would benefit from an innovation framework for turning ideas into a product or service, and 67 per cent look towards their outsourcing partner to turn ideas into new and improved processes. Meanwhile, 50 per cent said they would be willing to pay more for an outsourced service.

“In the reset economy following the global recession, the majority of senior European executives are in agreement that innovation is crucial to the financial performance of their organisations,” explained Ilan Oshri, Warwick Business School. “The future of work is about next-generation business models enabling globally distributed teams to deliver expertise, which drive efficiencies, innovation and the ability to rapidly respond to change.”

Sanjiv Gossain, SVP and head of UK and Ireland operations at Cognizant, added that businesses are placing more high-value work in their partners’ hands, but failing to record performance could hinder future investment.

“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.”

Gossain said the findings also indicate that businesses are missing an opportunity to demonstrate success through working with their outsourcing partners. “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,” he concluded.

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