Outsourcing Business Case
This is a practical guide to building a business case for an outsourcing project — the justification that weighs the costs, benefits and risks of doing the project, adapted to the realities of outsourcing a function to an external provider.
What a Business Case is
A business case is the justification that weighs the costs, benefits and risks of doing the project. For the full concept and how it works in general, see Business Case. On an outsourcing project it plays the same role, tuned to this kind of work.
Why it matters for an Outsourcing project
Outsourcing projects live or die on outsourcing a function to an external provider. A well-built business case gives the team a shared, explicit reference for exactly that — reducing ambiguity, aligning stakeholders, and making problems visible early enough to act. Skipping it, or doing it generically, is how outsourcing projects drift into avoidable delay and cost.
What to include
- Problem or opportunity
- Options considered
- Costs and benefits
- Financial appraisal (ROI/NPV/IRR)
- Recommendation
Outsourcing-specific considerations
Tailor the business case to the risks that most often derail outsourcing projects:
- Knowledge transfer
- Service-level definition
- People impact
Example
On a real outsourcing project, the business case would be shaped by outsourcing a function to an external provider. In particular, it should explicitly account for the project’s biggest risks — knowledge transfer, service-level definition, people impact — rather than treating them as afterthoughts.