An Overview Of The ISO Guidance On Outsourcing

INTRODUCTION

On 31 October 2014, the International Organization for Standardization ("ISO") published the first international standard for outsourcing, ISO: 375000: Guidance on Outsourcing (the "Standard").1 The Standard seeks to provide a comprehensive guide to the outsourcing process, regardless of the size of the transaction, the industry sector or the activities to be outsourced. The Standard provides guidance on the phases of an outsourcing project, the processes that organisations need to implement and the governance that is required for an outsourcing transaction to be successful.

The Standard is the final product of a process instigated by a request from the national standards authorities of the Netherlands and Switzerland in 2010. In 2011, an ISO Technical Committee was formed and received input from the standards bodies of 13 countries.2 The Technical Committee also received input from buyers, service providers, outsourcing advisors and academics over the four years of the Standard's development. A draft standard was published in 2013 and a final version was agreed in October 2014.

ISO standards are not legally binding but are important statements of industry specific best practice, which suppliers and customers alike are likely to make reference to, both in their general business conduct and in their contractual arrangements with customers and suppliers.

SCOPE OF THE STANDARD

The Standard covers the main phases, processes and governance aspects of outsourcing as a proposed potential 'one size fits all' reference model across all industry sectors. In addition, the processes are intended to be tailored to fit the specific outsourcing strategy and maturity of the particular customer and provider. The Standard starts with the precondition that a customer organisation has already established a sourcing strategy and concluded that there is a beneficial business case for outsourcing. The decision to continue or terminate outsourcing as a strategy option is outside the scope of the Standard and is based on the continuing validity of the particular business case at hand.

The Standard aims to provide a common vocabulary for stakeholders with which to interact and plan the outsourcing process and represents a useful toolkit for the governance of outsourcing throughout its life cycle.

Intended for transnational and horizontal application across industry, the Standard is principles-based and therefore does not enumerate specific legal or regulatory compliance issues that may arise during the outsourcing process. It nevertheless provides an effective...