ISO 37500 guidance explained: video brief

Guidance for clients and providers alike

ISO 37500 is the international guidance standard on outsourcing. It covers the main phases, processes and governance aspects of outsourcing, independent of the size of the organisation or its sector, and aims to give client and provider a sound foundation for entering into an arrangement and keeping it successful for the whole contractual period. Its four themes are governance for the mutual benefit of both parties, flexibility as requirements change, outsourcing risk and collaborative relationships. This short film walks through what it covers.

Because it contains guidance rather than requirements, there is no clause-by-clause audit and nothing to certify. Outsourcing governance is treated as a governance subject before it is a procurement one, which is why ISO 37500 sits alongside other governance, risk and resilience standards.

What the guidance addresses

The guidance addresses the outsourcing life cycle, the main phases of an arrangement, recognising that client and provider act separately in some phases and together in others; the processes that run through each phase, from deciding what to outsource to managing the arrangement until it ends; governance with decision rights, roles and escalation agreed by both parties; flexibility, so arrangements accommodate changing business requirements rather than locking in the needs of the day the contract was signed; the risks involved for both parties across the arrangement; and collaborative relationships.

Organisations use it through assessment. The arrangements, providers, entities and services in scope are agreed, the organisation's role as client, provider or both is confirmed, and strategy, contracts, governance and relationships are reviewed against the guidance, leading to a prioritised improvement plan. Leadership, internal audit and, where wanted, an independent reviewer judge the result. ISO 37500:2014 is the first edition, confirmed in 2021, and its use suits outsourcing clients, service providers and practitioners of any size or sector.

The guidance is written for both sides: a provider can use it to run its client accounts consistently, and a client to govern its providers, across IT, business process and facilities outsourcing alike.