5 Outsourcing Services Risks and Ways to Mitigate Them

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Despite its known paybacks, many business owners still have qualms on outsourcing services because of risks involved. For them, it’s a gamble where much is at stake. To know where they’re coming from, here are the likely problems with outsourcing as shared by discouraged business owners.

Why Not to Outsource

1. Loss of Control

When outsourcing services for a single task or an entire department’s tasks, you’re handing the control to another person or firm. The risk can stem from the worker’s free will to decide on matters as he/she sees fit.

2. Hidden Costs

Although the contract states all the details, those not covered in it may create more charges. Entrepreneurs may face drawbacks if they don’t have a full and right understanding of the terms in it.

3. Security Threats

One risk of outsourcing is the leaking of the clients and the firm’s confidential information. This threat is what most business owners fear and can happen when you’re handling payroll, medical records, and trade secrets as outsourced services.

4. Communication and Cultural Conflicts

When outsourcing services to a firm that’s on the other side of the world, communication and cultural conflicts may occur because of belief and language differences.

5. Dubious Accessibility

Outsourced works are likewise at risk of downtime when critical system failures happen in the service provider’s country. Therefore, such can lead to a potential loss in productivity.

Mitigating the Risks of Outsourcing Services

As with other business practices or schemes, you’ll face the pros and cons of outsourcing. Therefore, to ease the risks and gain a competitive advantage, here’s what you should do.

Risk Prevention Plan

A risk prevention plan keeps you from losing your control over outsourced services. The terms agreed upon by the firm and the service provider should include timelines, key staff to contact, and constant updates between parties on changes and mounting issues.

Service-Level Agreement (SLA)

This contract terms the quality, availability, and responsibilities assumed of the service. It names the services clients will receive. In fact, it will help business owners beat the risks of hidden costs and quality issues.

List of Past Clients

To ensure the quality and turnaround time, consult or check with current and former clients. So before you hire a service provider, it’s best to ask for references.

Non-Disclosure Agreement (NDA)

Further, signing a privacy or non-disclosure contract can protect the clients and the firm’s information from the wrong hands. This will save your business records, trade secrets, and personal data safe from outsiders and other businesses.

With enough knowledge on beating the risks involved in farming out your business tasks, the outsourcing benefits will soon outweigh the drawbacks. In addition, outsourcing services to trusted firms such as Outsource-Philippines can help. For more reasons to hire and inquire on this outsourcing company in the Philippines, check www.outsource-philippines.com/.

Sources: tradeready.ca | djangostars.com | smallbusiness.chron.com | thebalance.com | quickbooks.intuit.com | computerweekly.com