Over the last decade, outsourcing services have proven to be an effective way for customers to lower their IT costs and free-up management time for other activities, as evidenced by relatively high rates of customer satisfaction. However, these days, simply cutting costs is not enough. Innovation is back on the business agenda, and many companies are looking to their outsourcing providers to help them improve, and even transform their business. In this regard, both suppliers and customers recognize that there is room for a great deal of improvement.

In this two-part study, CSC's Research & Advisory Services explores this issue in detail Part I of the study examines the key reasons why achieving innovation through outsourcing partnerships has proven so difficult, with a particular emphasis on the challenges presented by long-term fixed contracts driven primarily by cost concerns. In Part II, we explore the processes and techniques that companies are using to address these concerns, with a special emphasis on the still under-estimated role of corporate governance.