The document outlines seven deadly sins of outsourcing (DSOs) that companies should avoid. The DSOs include: failing to align outsourcing with business strategy; failing to qualify vendor support; failing to instill proper governance; failing to assess risks; inability to maintain control of assets; failing to deliver business value from outsourcing; and permitting shadow IT. The key is for companies to put the right people, processes, and technologies in place to ensure outsourcing supports business objectives and risks are properly managed.
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P19_Seven Deadly Sins of Outsourcing_Laura Jones_6.12.19
1. The Seven Deadly Sins of Outsourcing
Laura A. Jones, Senior Manager, Integrated Risk Management
Floor & Decor Outlets of America, Inc.
2. 2
Defining Outsourcing
• “Outsource” or “outsourcing” refers to the
process of having an external entity complete a
task, business process or project.
• A deadly sin of outsourcing (DSO) is a failure
where outsourcing is concerned.
3. 3
Common Reasons to Outsource
• Lacking required skills within the organization
• Freeing internal resources
• Gaining access to best-in-class capabilities
• Reducing and controlling operating costs
4. 4
DSO-1: Failing to Align to Business Strategy
• Not confirming ability to meet requirements
• Disregarding potential impacts of partnering
• Failing to engage business stakeholders
5. 5
DSO-2: Failing to Qualify Vendor Support
• Indecision on when to outsource vs. insource
• Not confirming ability to meet business objectives
• Failing to understand risk profiles and impacts
6. 6
DSO-3: Failing to Instill Governance
• Shifting ownership and accountability
• Failing to maintain oversight and insight
• Vague or absent policies and processes
7. 7
DSO-4: Failing to Assess Risk
• Not performing initial or follow up assessments
• Ineffective evaluation of risk and compliance
• Not requesting the right to audit or reassess
8. 8
DSO-5: Inability to Maintain Control of Assets
• Ineffectual contractual security language
• Unable to map assets to sub-entities
• Not clarifying policy and procedures
9. 9
DSO-6: Failing to Deliver Business Value
• Misalignment of scope to business objectives
• Not fostering a team environment
• Inability to demonstrate return on investment
10. 10
DSO-7: Permitting Shadow IT
• Perpetuating divergent objectives
• Circumventing processes that reduce risk
• Not determining effectiveness of internal controls
11. Many DSOs can be avoided when people,
processes and technology work in unison. Putting
the right components in place will make a positive
difference in any organization.
Key Take-away
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