Outsourcing entered the business world in the 1980s and often refers to the delegation of non-core operations from internal production to an external entity specializing in the management of that operation. The decision to outsource is often made in the interest of lowering costs, redirecting or conserving energy directed at the competencies of a particular business, or to make more efficient use of worldwide labor, capital, technology and resources.

Though often used interchangeably, outsourcing differs from offshoring in that outsourcing is relative to the restructuring of the function while offshoring is relative to the nation, though the two are not mutually exclusive, especially under conditions of globalization. Fundamentally and historically, outsourcing is a term relative to the organization of labor within and between societies.  

Outsourcing is a delicate balance and should not be undertaken purely as a money saving exercise.  A common misconception in organizations is that when you outsource the "function" or the performance of the function, you also outsource the responsibility, accountability and risk.

This is definately not the case - certainly from a compliance standpoint .  Any outsourcing agreement will often come under close inspection when undergoing annual compliance audits.  The key test during this process is whether the outsourcer is considered to be "material" to the organization.

It is crucial that outsourcers like any other business partner are identified, selected and managed appropriately throughout the relationship lifecycle.  It is also important that organizations clearly define amongst other things:

• What they're outsourcing
• Why they're outsourcing
• What are the key success criteria
• How will this be reviewed

SNSMC is able to assist in the outsourcing relationship from cradle and hopefully not to grave!