In a globalised world, companies seek partners for cooperation and outsourcing in markets and regions suitable for their business. According to a 2016 survey by consulting firm Deloitte, most companies outsource to reduce costs, focus on core business areas and solve capacity issues. Outsourcing also creates opportunities for increased global trade between companies and for international relationships between countries.
While outsourcing is widely expected to grow—especially in functions such as human resources, information technology and finance—regulatory environments are becoming increasingly detailed and risk-focused for business operations in a number of historically regulated sectors. Half of all the private sector respondents in the 2016 Deloitte survey say that government legislation affects their outsourcing decision process, with 41% saying it makes them more cautious.
This practical guide, created by ICC’s Commission on Commercial Law and Practice, aims at facilitating and supporting regulated businesses when they outsource their activities and offers a tool for interpreting quality-based rules such as ‘sound governance’ and ‘proper risk management’. With the guide, ICC hopes to strengthen self-regulation in outsourcing, complementing other self-regulatory initiatives.
“Outsourcing is key to global open markets as access to new markets is often dependent on the possibility to outsource,” said Christina Strandman Ullrich, Senior Compliance Adviser at CSU Compliance and Member of ICC Sweden’s Committee on Financial Services and Insurance, who led the outsourcing guide project.
“All business activities involve risk but outsourcing vital business functions—especially in a context where standards and requirements are not always regulated—can compound risk, giving companies pause. We hope that this guide will build confidence and trust in the outsourcing process, with the end goal of facilitating trade and investment.”
ICC’s outsourcing guide provides general principles and guidelines for both the Outsourcing Party and Service Provider and is intended to be applicable in any jurisdiction. The guide is designed to be particularly useful when the outsourcing party is a regulated entity, such as where financial companies are required to ensure sound management of their business regardless of whether their activities are outsourced or not.
The ICC outsourcing guide is free for download on our website.