Outsourcing benefits and risks

Outsourcing benefits and risks

Outsourcing outweighs the benefits over risks…

Mentally strong people don’t fear taking calculated risks.

THE BIGGEST RISK IS NOT TAKING ANY RISK

But you can’t calculate risk based on your level of fear. Instead, it’s important to assess the actual level of risk by examining the facts. Create a list of the pros and cons and the potential risks versus benefits. Writing down the facts and reading them over will help you view the risk with logic–and that’s the key to balancing out your emotions.

The biggest risk is not taking any risk… In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks.

Mark Zuckerberg

Companies have embraced outsourcing as a way of reducing costs and resources. But outsourcing has its own set of problems that if not managed well, it can cost a lot.

The offshoring Back Office industry is growing and changing each has their style of management. With all this uncertainty, your company needs to measure and reduce risks exposed to them.

Talent Offshore offers a wide range of solutions to eliminate the risks associated with Offshore Back Office services.

Outsourcing benefits and risks – Managing outsourcing risks to get maximum benefits out of it.

SOLUTION FOR HIDDEN COST OR POOR SERVICES RISK

1. When you create a contract ensure you have listed all the expected services and read carefully to find out any hidden costs. Use a Service Level Agreement (SLAs) to limit the number of hidden costs that may appear.
2. A contract must include type of services, length, assurances, routines and renewals the outsourcing company will carry out.
3. In short, the contract needs to cover your needs and expectations to lower the risk of extra charges.

SOLUTION FOR QUALITY RISK

1. When you are commit to quality, your final products will shine. And when you outsource, you need the same level of commitment to quality and extend it to the third-party provider. Do your evaluation, ensure they have the same mindset as you.
2. Learn and observe how it is like to work with them, the challenges they faced, and how the final products turned out. That’s because you can’t trust, without their work, there’s no way you can build trust.
3. Look at the past experience and ask for references. It is common for a provider to say they deliver quality work without showing you the proof.

SOLUTION FOR CONTROL RISK

1. No one will know your business better than you and your staff, so formulate policies and practices which make your company what it is today.
2. The biggest problem happens when businesses and providers don’t work to achieve the same goal. The lack of collaboration can hinder the project before it even starts.
3. Create a detailed project management plan that describes how you want the outsourcing provider to manage the project and areas where you will collaborate or need updates frequently.
   1. Timelines
   1. Progress Reporting
   1. Rules for changes to business operations,
   1. Identification of Key staff to contact on both sides and their areas of specialty

SOLUTION FOR LEGAL RISK

1. Intellectual Property (IP) is the lifeblood of your company. Intellectual property is anything your company will create, brand, patent, trademark or yours. It is still vital for you to protect your assets. Sign a confidentiality agreement to safeguard your business secrets.
2. You can use a Non-Disclosure Agreement (NDAs) to describe the kind of confidential information and what happens if they violate the agreement.
3. In the negotiation don’t hesitate to ask your potential provider “why should I trust you?”. Any trustworthy person will give you an honest answer and will sign the NDA.

ASSESS RISKS EARLY

The worst nightmare you can face is getting stuck when surprises happen. Never leave things to chance, always assess the risks before you start the project. Once you know the risks and how you will mitigate them that’s when you can outsource.