BSI” the business standards company” has published BS ISO 37500: Guidance on Outsourcing, the first overarching ISO standard to set out the generic principles and procedures of outsourcing and assist businesses in accessing a common vocabulary on which to base their communications.
The value of outsourcing has already been noted by those organisations who want to increase efficiencies and reduce costs by contracting work to external third parties. This practice” which encourages mutually beneficial collaborative working relationships” has grown over the past 20 years and is estimated to generate revenues in the region of trillions of US dollars per annum.
Nevertheless, there are challenges and hazards to be encountered. Not all outsourcing deals are a success. Some can fail dramatically” and publicly” while others simply fail to perform well.
BSI ISO 37500 can help organisations boost their business efficiency, gain better value and help avoid costly mishaps. It can assist and support customers, service providers and third party advisors (such as lawyers and consultants) involved in outsourcing.
In particular, it will help organisations to identify the business case for outsourcing, select the most appropriate customer or provider partner, transition to the new operating model and deliver value through the relationship.
BSI ISO 37500 is relevant to all markets including manufacturing, retail, financial services, the public sector and facilities management.
Dan Palmer, head of market development for manufacturing and services at BSI, explained:” Outsourcing can apply to any business in any industry and in any location. By providing common practices, concepts and procedures that can be used to manage the outsourcing life cycle, BS ISO 37500 will improve the understanding of everyone involved in the process and lead to greater success.”
Benefits of BS ISO 37500
‘¢ Improved operability by harmonising communications between organisations engaged in” or in the process of engaging in” outsourcing in national and international markets
‘¢ Includes the terminology, concepts and procedures to improve the understanding of all parties involved in outsourcing
‘¢ Uses a common vocabulary for outsourcing communications, avoiding misunderstandings and incorrect and/or unrealistic expectations and reducing transaction costs
‘¢ Boosts business efficiency which will benefit everyone involved in the process
The international standard was developed by experts from countries including Canada, Germany, India, Malaysia, Netherlands and the UK. Additional UK input came from organisations including AEGON, BP, CapitalOne, DWF, Gartners, IBM, the National Outsourcing Association and PwC.
Adrian Quayle, chairman of the ISO Committee which developed the standard, added:” The benefits of using a standard such as BS ISO 37500 are clear. It provides the cornerstones of what businesses need to get right when they’re outsourcing. The application of this guidance provides all parties involved in outsourcing activities across the life-cycle with the assurance that business objectives can be achieved by using common governance and processes.”