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Outsourcing Risks and How to Minimize Them


Though companies can gain great value from outsourcing many business functions, it is important that they consider the risks involved and proceed carefully. Business process outsourcing is an attractive option because businesses can assign several of their non-core tasks to a service provider. The upside benefits include professional competence, increased productivity, and enhanced revenue. However, while the gains are important, focusing on the following points can help minimize risks:

  • Carefully consider the goals of outsourcing
  • Determine what to outsource – go by industry trends and consider outsourcing functional areas that your competitors choose to outsource
  • Involve all stakeholders early in the process
  • Realize the compliance implications involved in outsourcing and make sure they can be dealt with
  • Consider the risks involved in outsourcing and whether they can be successfully mitigated – this is possible with a strong outsourcing partner
  • Compare and consider all options to choose the right outsourcing service provider
  • Make sure the provisions of the contract are clearly understood and contains all the terms agreed to
  • Estimate risks and costs

As the goal of outsourcing is gaining a competitive advantage, the service provider should be able to offer significant cost savings.

About Rajeev R

Rajeev R

Manages the day-to-day operations of MOS from NY. With an interest in information technology, Rajeev has guided MOS to extensive use of digital technology and the internet that benefits MOS as well as MOS clients.