Definition of outsourcing
Outsourcing refers to the outsourcing of a business’s internal processes or activities to an external supplier under a specific contract. When an organization outsources some of its business activities or processes to a supplier outside of its company or organization, it is called outsourcing. In many cases outsourcing, decision-making and production factors are delegated to another organization.
What is ISO 37500 ?
ISO 37500 was issued in October 2014 by the International Organization for Standardization (ISO) because of the need for a comprehensive international standard for outsourcing that can be applied to all types of outsourcing transactions.
ISO 37500 covers the main stages, processes and governance aspects of outsourcing, regardless of the size and sectors of industry and commerce. This standard provides a good basis for organizations to implement and maintain successful outsourcing arrangements throughout the contract period.
In other words, this standard provides organizations with a comprehensive guide to the outsourcing process, the processes that organizations must follow, and the governance needed to succeed. These steps are:
- Outsourcing strategy analysis
- Start and select
- the transfer
- Delivery value
ISO 37500 describes each step in detail, the processes to be created or the activities to be completed during the steps, and identifies the key success factors, inputs, and outputs for each process or activity.
ISO 37500 also includes terms, concepts and procedures to improve the understanding of all parties involved in outsourcing.
Why ISO 37500?
- Outsourcing governance for mutual benefits for the customer and the provider;
- Flexibility of outsourcing arrangements, adaptation to changing business needs;
- Identify risks associated with outsourcing;
- Establish mutually beneficial mutual relationships
Why is outsourcing important?
Outsourcing offers many business opportunities to organizations, as follows:
- Helps manage costs.
- By redefining the organization’s strategy for internal and external processes, it helps in strategy changes.
- Increases access to capabilities that are not available within the organization and transfers risks by increasing the share of variable costs.
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