A common misconception is that outsourcing leads to a loss of control within a firm. This is especially relevant in regulated markets, where a firm can outsource a process, but is still ultimately responsible for the compliance of the function and the outcomes of customers. Where structured correctly, outsourcing can in fact provide enhanced levels of oversight and support whilst allowing you to retain control of aspects you desire.
Through pragmatic and open discussions, it is possible to alleviate any concerns relating to the governance and controls around of the outsourced work:
- There should be a strong emphasis on robust due diligence to ensure you are entering negotiations with an outsourcing partner who has both the proven credentials which can be evidenced and don’t be afraid of asking for a reference to support this as this will be the foundation of any future relationship you hold
- A robust governance framework will complement your desired levels of control and oversight, enabling you to keep close to how your supplier is performing and whilst highlighting areas which need particular attention
- From the outset, define what you consider a ‘successful’ operation to be and advise prospective suppliers upfront. With an upfront understanding of what your key KPIs and SLAs are, you will be presented with a more credible proposal which is better aligned to your business requirements
- As with any operation, things can go wrong regardless of the control mechanisms put in place. To mitigate against this (and provide all parties with a common goal), contractual service credits should be agreed in conjunction with the right for the parent firm to ‘step in’ or conduct ‘enhanced monitoring’ should pre-agreed service levels not be achieved over a period of time
The above factors should work in harmony to provide a strong level of control. Ultimately, prior to finalising any agreements, the parent firm should be confident that its chosen partner will act as an extension of the existing business, providing the desired level of involvement and control.
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