Outsourcing is a science and an art. The science has developed well over the past 20 years. There are international standards of best practice that describe the processes in the life cycle of an outsourcing arrangement: the make or buy strategy, through contracting, onto transitioning from current to new arrangements and post contract relationship management.

The body of outsourcing science now includes a substantial battery of tools for practitioners to learn to use. They include tools for clarifying business drivers, reviewing the current situation, exploring sourcing options and developing roadmaps and business cases. There’s a well-developed series of tools to select the best supplier, draft contract terms and negotiate deals. From the world of project and change management we’ve collected an array of approaches for transitioning from the current supplier, or from in-house to the new supplier. We also now have tools for managing the contract ‘in-flight’ after the contract has been signed.

With all this science – and all of it is necessary – why then have so many organisations reported that the outcomes from their outsourcing arrangements have not been achieved? In some cases, it’s pretty simple. The science wasn’t used. If you want examples you only need to look at the UK government’s high-profile outsourcing disappointments. There are a number of them, perhaps the most recent to stick in the memory is Carillion and Capita’s recruitment contract with the Army. Using outsourcing science tools would have helped to avoid both debacles. 

Science is necessary – it is not sufficient to achieve outsourcing goals. The art of outsourcing is required to complement, indeed, to facilitate the science and vice versa. They are two sides of the coin. The art of outsourcing I define as human commercial interaction. It is how people interact in a commercial environment and how those people interact with commercial concepts.