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Importance of the Outsourcing Governance


The term governance refers to the various rules that dictate the roles of clients and stakeholders in a contract. Outsourcing governance is the framework that provides the procedure to reach the set organizational goals and gives a detailed explanation of how to achieve them. Outsourcing governance stresses the need to work as a unit to achieve the same goal (Sulkowski, 2018). Governance is an important factor in industries and big business organizations because it ensures that an organization’s goals are met (IACCM, 2011). For the success of an organization’s project, there needs to be a good way of governing and managing the employees’ task force and handling contracts between the company and the involved party.

Main body

The article Finance and Strategy practice talk about the importance of establishing unity and mutual understanding between the clients and the company before the commencement of a project. A business structure has different people with different plans and goals for a particular project (Vitasek et al., 2012). Therefore, there is a need for the organization involved to look for a way to merge people’s goals into one overall goal by balancing their competing interests and wants through a relationship management structure (IACCM, 2011). This article has greatly changed my thinking on outsourcing governance because it emphasizes procedures that will help the parties involved in the agreement work towards a goal that will benefit all of them.

To achieve this in my organization, I could focus on incorporating three key elements, such as an exit management plan, transformation management process, and relationships management structure (IACCM, 2011). The arrangement of internal stakeholders can be made by ensuring that the service delivery, transformation management, and vendor management teams work towards achieving the same overall result (Bray, 2020). In my organization, I use a procedure that deals with insight performance where each employee is only concerned with performing their roles, ensuring they go to completion, which is similar to the transformation management process (IACCM, 2011). This method has proved important because, by each employee and stakeholder performing their role, they end up achieving the organization’s goal. One of its advantages is that it does not involve many procedures and meetings; therefore, it’s more likely to save time as compared to the oversight procedure.

By comparing the insight and oversight governance methods, it is clear that the oversight method is recommendable because it works toward the satisfaction of all the parties involved in the contract. With regard to governance, I would rather choose to change the method I currently use to the oversight governance method since the latter is effective (IACCM, 2011). In my current structure, there have been very many drawbacks because there is no unity between the employee and stakeholders, which is why a relationship management structure needs to be established (IACCM, 2011). Everybody is only concerned with achieving and doing their roles even if it will not meet the overall goal of the organization.


In conclusion, having well-planned governance has a direct positive effect on the success of a project. Governance acts as a tool that guides the management processes making it easier for the organization to achieve its goals. Initiating collaborative governance based on the unity of the organization rather than insight should be the key ambition of many business organizations.


Bray, R. (2020). Operational transparency: Showing when work gets done. Manufacturing & Service Operations Management.

IACCM. (2011). Unpacking outsourcing governance [PDF document].

Sulkowski, A. (2018). Blockchain, law, and business supply chains: The need for governance and legal frameworks to achieve sustainability. SSRN Electronic Journal.

Vitasek, K., Kawamoto, C., & Stevens, G. (2012). Finance and strategy practice: Unpacking outsourcing governance. Strategic Outsourcing: An International Journal, 5(1).

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"Importance of the Outsourcing Governance." ApeGrade, 31 Mar. 2023, apegrade.com/importance-of-the-outsourcing-governance/.

1. ApeGrade. "Importance of the Outsourcing Governance." March 31, 2023. https://apegrade.com/importance-of-the-outsourcing-governance/.


ApeGrade. "Importance of the Outsourcing Governance." March 31, 2023. https://apegrade.com/importance-of-the-outsourcing-governance/.


ApeGrade. 2023. "Importance of the Outsourcing Governance." March 31, 2023. https://apegrade.com/importance-of-the-outsourcing-governance/.


ApeGrade. (2023) 'Importance of the Outsourcing Governance'. 31 March.

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