CLIPPINGS

Abstract

The litmus test for evaluating a true outsourcing offer as opposed to a reengineering project is called the monkey test. Consider any particular set of context responsibilities [those that do not affect share price] as the monkey. The question is, at the end of the day, Who has the monkey on their back? The fundamental value of any outsourcing offer is to move the monkey from you back to theirs. If the monkey stays on yours, you have not won back any of the scarce resources needed in the age of the Internet—you still are allocating time, talent, and management attention to managing the monkey. That's a bad deal. But conversely, if you can truly free yourself from the monkey, then regardless of whether there is an immediate cost reduction to take to the bottom lie, you have won the key battle of capturing scarce resources to refocus on core activity.

Citation

(2000), "CLIPPINGS", Journal of Business Strategy, Vol. 21 No. 5, pp. 6-7. https://doi.org/10.1108/eb040109