Outsourcing involves both macroeconomic risk assessment and gamesmanship, relating to global economic events, and microeconomic risk management for the individual enterprise. Investors naturally appreciate both types of risks and opportunities.
Outsourcing law informs investment professionals of such risks and helps reduce investment risk through reducing transactional risks. Just like boards of directors, investment professionals can benefit from a grounding in the fundamentals of outsourcing and governing legal regimes. Outsourcing lawyers can provide invaluable advice to investors in assisting in the evaluation of business plans, the optimization of “cash burn” through effective outsourcing and risk management at early stages in a portfolio company’s development.
Private Equity Investment Careers
Private equity investors range from high net worth individuals (“angels”) to venture capitalists, private equity fund managers, corporate business development personnel for private entities, corporate pension fund administrators and their financial advisors. Investment professionals need to understand the business, law and regulation of outsourcing. Armed with this understanding, such investors and advisers can
- identify trends in new business opportunities for promising investment opportunities;
- evaluate whether a company is using its resources most effectively for achieving return on investment;
- evaluate the sensitivity of industries and individual companies to the uses, benefits and risks of outsourcing; and
- apply strategic investment analysis to decision making on investments, particularly cross-border investments.
Corporate Financial Investment Careers
Within corporations, the “business development executive” has emerged as the code word for investment opportunity advisor and manager. Training in outsourcing affects not only the evaluation of third-party performance, but also the optimization of resource utilization within the individual enterprise.