Outsourcing strategies: the rules for an effective decision making process

Outsourcing strategies have undergone a deep evolution, from simple production contracts with third parties, to agreements that involve functions once considered part of the core business. Outsourcing has transformed many organizations’ global supply chains. Global sourcing, offshoring, and outsourcing are a critical output of strategic decision making aimed at allowing organizations to develop and leverage the capabilities required to compete in today’s global business environment. By analyzing established academic literature, this article improves existing knowledge on outsourcing and provides some basic rules for the outsourcing decision making process. Finally, it develops considerations about contract negotiation with the supplier and determines the types of relationships to have.