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.

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.

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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

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DSO-1: Failing to Align to Business Strategy
• Not confirming ability to meet requirements
• Disregarding potential impacts of partnering
• Failing to engage business stakeholders

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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

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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

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DSO-5: Inability to Maintain Control of Assets
• Ineffectual contractual security language
• Unable to map assets to sub-entities
• Not clarifying policy and procedures

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DSO-6: Failing to Deliver Business Value
• Misalignment of scope to business objectives
• Not fostering a team environment
• Inability to demonstrate return on investment

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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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