Outsourcing is one activity that can bring in a lot of money. We all know that. What is not well known is the fact that there are several risks involved. The problem is that a lot of companies do not consider this and they are faced with cost overruns or smaller profits than they planned in the beginning. This usually happens when one point in the company’s outsourcing strategy is not well covered. We are talking about risk management. This is highly important and can save you a lot of money on the long run, especially when we are talking about technology services.
Outsourced technology services are tricky to handle because there are numerous aspects that have to be considered. This starts with costs and finishes with time needed to perform certain tasks. It does not really matter what type of technology service we are talking about because all of them need risk management.
When we outsource technology services we aim to get something back and a part of our profit is directed towards that activity. This is done in order for the project to be finished faster in most circumstances. Finishing something fast brings in profit because our work flow is increased. Risk management of outsourced technology services is needed in order to prevent all problems that can appear. Unfortunately we can only do this if we include it in our outsourcing strategy. This basically means that risk management needs to be included in the overall plan and must not be neglected.
There are 2 ways to handle risk management of outsourced technology services. The one that is most cost effective is to have a team on board that monitors everything and deals with this part of the business. On the other hand we can also hire a specialized outsourcing risk management team that will do everything for us. It is needless to say that the second option is the one that will cost us more money. Even if in both cases we do obtain profit, in the first one it is bigger. This is what we are aiming towards: bigger profits. In this case we have to seriously consider including outsourcing strategy in our business. The good news is that we can do this easily if we are faced with proper information. To put it simple, we need to understand everything that is involved with risk management of outsourced technology services in order to be successful and maximize our profits.