CFOs Say Outsourcing Increases Value, But Few Measure ROI

ByJohn S. McClenahen From information technology to human resources, companies continue to outsource non-core functions in the belief that they are increasing shareholder value. Yet, a study from Hewitt Associates LLC, a Lincolnshire, Ill.-based consulting firm, indicates that very few companies actually measure outsourcing's return on investment (ROI). Some 90% of the 500 CFOs and senior finance executives in large companies (those with $1 billion or more in revenue) surveyed believe that outsourcing enhances shareholder value, but only 17% say their firms have measured ROI. The CFOs who have measured ROI, however, say outsourcing cut expenses in 2001 by an average of 17%. And they expect similar results this year. CFOs report their companies have partially or completely outsourced IT (57%), human resources (41%), facilities management (40%), and finance and accounting (40%). Amazingly, 40% say they don't know what functions are being outsourced.