What to outsource, and what never to: managed business services done well

Few decisions are made as casually as the decision to outsource, and few have such long consequences. A growing company outsources payroll because it is tedious, or customer support because hiring is difficult, and three years later realises that it has handed over something it needed to understand.

The question is not whether to outsource. Almost every organisation does, from cloud hosting to cleaning. The question is how to decide, and how to govern what you decide.

A disclosure: NURBIX offers managed business services, so we have a view and an interest. We have tried to keep the framework below as useful to a buyer who decides to keep everything in-house as to one who does not.

What Deloitte's survey shows

Deloitte's Global Outsourcing Survey 2024 draws on more than 500 executives globally, including more than 150 from the C-suite. Several of its findings change the traditional picture.

500+

executives surveyed globally, 150+ from the C-suite (Deloitte, 2024)

83%

use AI as part of their outsourced services

20%

are developing strategies to manage digital workers

• Skilled talent and agility now join cost reduction as key drivers for outsourcing. Cost is no longer the whole story.
• Outcome-based delivery models have grown in adoption, favouring relationships built on results rather than effort.
• Back-office outsourcing remains common, while front-office and core functions are gaining attention.
• Insourcing and global in-house centres are rising, a reminder that some organisations bring work back or build their own capability.
• AI is widely present in outsourced services, but tangible gains such as productivity or cost reductions have been limited, mainly because of governance and contracting challenges.
• Deloitte suggests expanding vendor management offices to govern the full extended workforce, including digital workers.

The survey does not give percentage breakdowns for cost, outcomes or partnerships on the public page, so we do not quote them. The direction is clear enough: outsourcing is becoming a strategic capability decision, and the quality of governance decides the result.

A four-question test

1. Does this function define how we compete?

If your advantage lies in how you design, deliver or price, keep control of it. A distinctive production process, a proprietary method and the first-line customer relationship are rarely good candidates. Payroll processing, routine accounts payable, standard IT support and document handling rarely differentiate anyone.

2. Is the process stable and written down?

A supplier can run a defined process. It cannot rescue an undefined one. If the work depends on tacit knowledge in two people's heads, document and simplify it first, or the supplier will spend its first year discovering what you do.

3. Can we measure it from the outside?

Good candidates have clear volumes, turnaround times and quality measures, so that performance can be written into a contract and checked. If success is hard to measure, you will struggle to govern the supplier.

4. What is the cost of failure, and can we recover?

Consider data sensitivity, regulatory exposure and the damage a lapse would do to customers. Where the risk is high, you need stronger controls, clear data-protection terms, and a tested exit route.

What tends to go wrong

• Outsourcing a mess. The problems arrive at the supplier unchanged, now with a contract around them.
• Buying hours instead of outcomes. A rate card rewards activity, not results.
• No internal owner. Without a person accountable for the relationship, quality drifts and nobody notices.
• Losing the knowledge. When the people who understood the process leave, the buyer can no longer judge the supplier.
• No exit plan. Lock-in is easy to create and costly to reverse.

Governing the relationship

The most successful arrangements we see share a few habits. They write service levels around outcomes the business cares about. They keep a small internal team that understands the work and owns the relationship, which is the principle behind Deloitte's recommendation on vendor management offices. They review performance on a fixed rhythm, weekly for operations and quarterly for direction. And they agree in advance how AI and automation will be used in the service, who benefits from the savings, and who is accountable for errors, a point of friction the survey identifies.

A word on the Rwandan context

Rwanda has promoted itself as a location for outsourced services. A 2021 destination guide by the German Outsourcing Association, supported by Invest for Jobs, was commissioned by Digital Skills Accelerator Africa and reported that the Rwanda Development Board expected business process outsourcing to become the fastest-growing segment of the economy, with interest in call centres, technical support, app testing and AI. For local organisations, the practical point is that capable service providers are increasingly available closer to home than they used to be.

Outsourcing done well frees management attention for the parts of the business that only you can run. Done carelessly, it moves a problem somewhere you can no longer see it. The difference is almost always the preparation and the governance, not the supplier.