OUTSOURCING: BUSINESS RATIONALE DRIVES LEGAL SOLUTIONS
While outsourcing has been an important legal sub-speciality since the early 1990s, over the past number of years the volume and complexity of this work has veritably taken off. The reason is simple: the volume of outsourcing activity doubled in the last decade. One estimate puts the annual growth rate of outsourcing at 20-30%. In short, outsourcing is big business, estimated at well over $1 trillion. Moreover, one leading consultancy with an active practice advising companies on the strategic and operational aspects of outsourcing, figures that only 10% of what can be outsourced actually is currently, leaving a potentially huge remaining market in this area.
What Is – And Is Not – Outsourcing
To be able to advise effectively on the legal aspects of outsourcing, it is necessary to understand what outsourcing is – and is not. A working definition is: outsourcing is a long-term, commercial relationship where a service provider (SP) is contracted to provide for a user organization, in a manner determined primarily by the SP, the services (and possibly related infrastructure assets) surrounding a material business process that was previously performed internally by the user.
