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Introduction

This risk analysis toolkit is designed to provide the buyers of outsourcing contracts a standardized approach to analyze potential risks as well as create risk mitigation strategies.  The toolkit explores 5 different types of risk and creates a frame work where buyers can quantify the risk exposure and use outsourcing as a strategy to reduce risk.  The toolkit can also be customized to address buyer specific risks.

Scope

The template is broken into 2 documents.  The first document defines the different types of risks regularly associated with outsourcing and the sub-dimensions to be considered for each of these risks.  The second document is a workbook that helps the buyer quantify the risks associated with his/her enterprise as well as creates risk maps to identify risk mitigation strategies.

Contents

The toolkit analyzes 5 types of risk; each type having its own unique sub-dimensions, considerations, and mitigation strategies.

• Financial Risk: A risk that would change the expected financial outcomes
• Operational Risk: A risk that would prevent the business from meeting its current or evolving technical requirements
• Organizational Risk: A risk that hinders the organization’s (i.e., buyer, supplier or governance) ability to enable the desired outcomes
• Legal Risk: A risk that puts the relationship sufficiently out of legal conformity (contract, regulations, enforceability) such that penalties are incurred
• Strategic Risk: A risk that the option would not support or would fall out of alignment with the strategy of the organizational unit (e.g., BU, corporation)