The AMCs of Modelling Your Outsourcing Contracts

Many people have the view that an organization can let go of commodity functions but must not let suppliers get their hands on strategic areas. Others call that nonsense and use third parties wherever they think they should. The arguments over this point generally result from inappropriate generalizations made on either side. To help you understand some of the complexity, the AMC (Advantage, Maturity, and Competence) Model provides a useful, high-level “helicopter” view of a framework your organization can use to consider its competence relative to its peers, the maturity of the market providing the services, and the degree to which activities are core/noncore in order to deter- mine which outsourcing form is the best to use .