About four years ago I attended a conference in Sao Paulo, Brazil where Michael F. Corbett, Chairman of the International Association of Outsourcing Professionals (IAOP), was speaking to an audience of CEOs about sourcing strategies.  He cited a 3-Question Test that can help guide senior executives in considering sourcing as a management strategy.  I give Michael all the credit for this vein of brilliance.

Question 1:    If you were starting your business from scratch today, would you do _____________ (fill in the blank… IT, back office, HR, procurement, etc.) yourself?
If you were able to start your business with a white sheet of paper, your first thought might be “what does the marketplace have to offer?”  Look at it this way – think of yourself as a venture capitalist who is evaluating an exciting new companies’ business plan and the plan calls for the company to build out a new data center to get their IT established (I know… I am exaggerating to make a point).  Is that where you’d want to invest and count on a big ROI?  I think not.

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