What are the potential benefits and what are the risks?
There is a lot of passion associated with outsourcing! Some are passionately for it (the new business
model of the virtual company) and some are passionately against it (exposure to risk and loss of key
The reality is that it is always a balance of risk and opportunity - and the balance depends on the
particular activity under consideration. The case also depends on the benefits being pursued (costs
and/or quality and/or change in mindset) and the competencies of the outsourcing organisation.
The Outsourcing iQ iPad app helps you or your business team decide whether to outsource a
specific activity and to identify the associated risks. It provides a disciplined process that will assist
managers to come to a shared conclusion.
It takes a business team through a comprehensive consideration of the cost, quality and behavioural
case for outsourcing a particular activity and a examination of the risks - hopefully without the
usual emotion. It can be applied to payroll, help desks, sales forces, catering staff, manufacturing,
Board of Directors....
The issues it covers include:
The economic benefit
This includes a consideration of economies of scale, variability of demand and the longevity of the
demand for this activity.
The quality benefit
This includes the access to skills, the competency and focus of potential suppliers and geographical
The behavioural benefit
This includes consideration of the need for business focus and changing the mindset of the business
to this activity and changing the mindset of the function providing this activity.
The business risk
This includes consideration of the ability to reverse the outsourcing decision or change the supplier
if things go wrong, and also whether the business has the competence to outsource. Does it
understand the economics of this activity, can the requirements be specified easily and does the
business have the outsourcing skills of contract negotiation and management, project management
and employee management skills?
Click here for details of the Outsourcing iQ iPad app.