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Boom in Outsourcing Leads to New ISO Standard

ISO 37500 is intended to relate to any outsourcing relationship

Published: Tuesday, December 2, 2014 - 16:54

(ISO: Geneva) -- As businesses worldwide look to be more nimble, reduce risks, and tap into wider networks of expertise, it’s no wonder that the trend toward outsourcing has exploded. Just as well that a new ISO standard for outsourcing has been published.

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

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’s not without challenges, some rising from the plethora of methodologies.

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

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

ISO 37500 addresses issues of flexibility in outsourcing arrangements, accommodating changing business requirements. The risks involved in outsourcing are addressed 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, labor, health, and safety; the size of the outsourcing arrangement; and the type of industry sector.

The 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 issues that arise.

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The International Organization for Standardization (ISO) is the world’s largest developer and publisher of international standards. ISO is a network of the national standards institutes of 162 countries, one member per country, with a Central Secretariat in Geneva, Switzerland, that coordinates the system. ISO is a nongovernmental organization that forms a bridge between the public and private sectors. ISO enables a consensus to be reached on solutions that meet both the requirements of business and the broader needs of society. View the ISO Standards list.