Boom in outsourcing leads to new ISO standard

As businesses worldwide look to be more nimble, reduce risks and tap into wider networks of expertise, it is no wonder that the trend towards outsourcing has exploded. Just as well that a new ISO standard for outsourcing has just been produced.

Outsourcing – transferring work to external companies – is nothing new. But Deloitte’s recent 2014 Global Outsourcing and Insourcing Survey showed that in recent years it has taken off, and they predict the trend to continue growing at rates of 12-26%.

Initially focused on highly transactional back-office processes or noncritical services, outsourcing now encompasses strategic functions, with some companies off-loading entire segments of their value chain.

Providing access to the latest technologies, reducing headcounts and therefore reducing risks make outsourcing highly attractive. But it is not without its challenges, some rising from the enormous plethora of methodologies.

Which is why ISO’s Technical Committee for Outsourcing, ISO/PC 259 developed a new international standard.

Developed by experts from both industry and standardization, ISO 37500:2014 Outsourcing is for those who have already made the decision to outsource, focusing on the common processes and best practices for success, putting governance at the heart of the standard.

Outgoing chair of ISO/PC 259 Adrian Quayle said: “Experience has shown that many of the problems arise from the lack of, or poor, governance practices.”

ISO 37500 addresses issues of flexibility in outsourcing arrangements, accommodating changing business requirements. The risks involved in outsourcing are confronted to enable mutually beneficial collaborative relationships. The standard is intended to relate to any outsourcing relationship, whether outsourcing for the first time or not, using a single-provider or multi-provider model, or draft agreements based on services or outcomes.

In addition it can be tailored and extended to industry-specific needs to accommodate international, national and local laws and regulations (including those related to the environment, labour, health and safety), the size of the outsourcing arrangement and the type of industry sector.

The economies of scale, financial rewards, the flexibility and increased productivity promised by outsourcing mean it will be a hot commodity for some time yet. ISO’s job will be to monitor developments and trends and to create standardized solutions for the inevitable issues that arise.