04 - Outsourcing - ISC

It's the process of letting someone else do things for you that are not part of your core business.

Benefits

• Time saving
• Reduced cost on labor
• Saving on technology
• Increase efficiency
• Flexibility

Risks

• Lose control
• Quality issues
• Hidden costs
  • ex: If production is done elsewhere, than maybe you didn't account for transportation’s costs
• Dependency

Outsourcing requirements

• Evaluate and define service
  • Clear definition of tasks / operations to be outsourced
• Document clear SLA (Service Level Agreement)
  • Rights and obligations
• Ensure Supplier conditions
  • Infrastructure
  • Human Resources
  • Financials
• Law compliance
  • Be compliant with local subcontracting law