A Framework to Create a Business Case for Outsourcing

This paper presents a framework for assessing outsourcing benefits and costs from the firm’s perspective; then, it identifies the specific governance costs associated with outsourcing; delineates the three major determinants of outsourcing governance costs: product/activity complexity, contestability and asset specificity; presents four standard potential outsourcing situations and suggest appropriate responses for each; and finally, presents some brief conclusions relating to the contingent nature of the potential net benefits of outsourcing