Guideline for outsourcing practices
The first international standard for outsourcing, DIN ISO 37500, provides certainty to SMEs, too
In terms of outsourcing, the opinions were split for a long time: the big ones among the companies obtained room to manoeuvre for their core business by outsourcing functions. Small and medium-sized enterprises (SMEs), however, shied away from this step. Insufficient outsourcing experience, worrying about their business-critical data, fear of intransparency and dependency were hindering a good many in terms of handing tasks over to third parties. Now also available in German, the first international standard for this subject area – DIN ISO 37500 „Guidance on outsourcing“ – standardises the process of outsourcing. From the analysis of the outsourcing strategy, via provider selection and transition/transformation, all the way to operations, all factors have been taken into consideration. As such, the standard now eases the safe and secure access to this area of business even for small and medium-sized enterprises. Fundamentally, everybody is profiting from the new standard, regardless of company size and industry sector.
The internationally applicable standard, developed by 21 country organisations, provides generally applicable descriptions of approaches and suggestions for all types of organisations for carrying out outsourcing projects. In addition to the terminological foundations, it contains typical concepts to improve the joint understanding of the parties involved. For this, it presents generally accepted examples from practice that can be utilised for the management of the outsourcing lifecycle.
The new standard covers the essential phases, processes and governance aspects within the outsourcing process. Independent of the sector of trade or industry, it points out critical success factors as well as inputs and outputs in each phase. Focal points are:
- Promotion of good governance in the outsourcing process
- Flexibility of outsourcing projects, taking into consideration changed business requirements
- Risk management as part of outsourcing
- Promotion of sustainable business relationships
- Methodology from the idea all the way to implementation and operation
Responsible for the standard is the working group „Outsourcing“ at the German Institute for Standardisation (DIN). It has been published by Beuth Verlag publishers. noventum consulting has played an active role in the creation of the standard right from the start. Frank Wübken, service manager and management consultant IT sourcing at noventum, has taken part in the international working group in various roles. Last, he was active as Head of Delegation of the German delegation, 2013 – 2015. „noventum has been dealing with the consulting topic of IT outsourcing for many years already. We have gained extensive experience in each individual aspect of the sourcing lifecycle. As such, it was more or less a point of honour for us to want to make this experience available to the international working group“, said Frank Wübken. „Of course, such a sophisticated process of finding a standard always also constitutes an opportunity to deepen one‘s own knowledge in the exchange with other experts. And this does, last but not least, benefit our customers who have an experienced partner at their side with us who also has a firm grasp of the international sourcing business.“
The increasing internationalisation in the sourcing market often poses a particular hurdle for companies from the SME sector. Starting with simple language problems, the international practices, the special governance requirements, as well as the lack of process certainty all give rise to considerable hesitance when it comes to sourcing questions. Here, the DIN ISO 37500 „Guidance on outsourcing“ can provide for an initial fundamental certainty.
In the cooperation with sourcing consultants, the standard can be utilised like a handbook, too. „The management bearing responsibility receives its expertise back, so to speak, to be able to responsibly make the important decisions for its own company itself. That is already a big help when taking into consideration how much large scale IT in particular is being affected by the sourcing market. Sourcing is always an option in any IT strategy finding, be it as outsourcing, as partial outsourcing, or also in the sense of bringing IT back into one‘s own company. With the DIN ISO 37500 „Guidance on outsourcing“, there is now a codex of terminology and activities with which one can work“, explained Frank Wübken.