Outsourcing takes place when an organization transfers the ownership of a business process to a supplier. The objective is to allow a company to focus on its core business by tasking an outside source to handle its noncore operations. However, outsourcing comes with its own set of risks and a failure to manage it can have a major impact on the company.
This document focuses on questions to consider when evaluating outsourcing risks, including: Are the core and noncore activities or functions clearly defined? Is there a full understanding of the total cost of activities outsourced or planned for outsourcing? Is there a competitive advantage for outsourcing? Has there been an exhaustive review of possible outsourcing vendors?