The Risks of Outsourcing
Posted on November 21st, 2007 by Audit Trail »Permalink
We’re not going to bore you (we hope) with a rehash of the myriad efficiencies that outsourcing offers operations both domestic and global – or with the larger macro effects. Outsourced operations and the savings and increased efficiencies they offer are a fact of life, and we don’t see that changing anytime soon.
But [refer to GE, Citi news in NetworkWorld] it’s worth taking some time to consider potential downsides when working to design a successful outsourcing problem — there are common pitfalls to watch out for and mistakes to avoid. For every redundancy that a smart outsourcing program eliminates and every dollar that it saves, there also exists an increased element of risk in managing operations from a distance, both simple and complex. As any line manager would be happy to explain, management is easiest face to face. Add in unfamiliar governments and regulations, foreign bureaucracies and cultural issues (like concerns about Chinese New Year coinciding with FY end), and things become even more complicated.
That’s not to say that outsourcing doesn’t continue to make sense for vast numbers of our corporate colleagues – just that doing it smartly means an awareness of potential issues, including:
•Need for standardized operations across offices, domestic and abroad
•Visibility into operations to understand variations from standard business
practices – to enable enforcement and correction
That’s where Approva comes in, of course. Incorporating these elements at the front-end through continuous controls monitoring not only helps avoid the pitfalls above, but it enables overall tightening of business process and consolidation of operations that smooth the whole process. Not to mention the peace of mind that comes from the knowledge that operations both domestic and abroad are subject to the same controls.
Tags: Outsourcing, Risk Management, Continuous Controls Monitoring
November 21st, 2007 at 2:52 pm
[…] The Risks of Outsourcing By Audit Trail We’re not going to bore you (we hope) with a rehash of the myriad efficiencies that outsourcing offers operations both domestic and global – or with the larger macro effects. Outsourced operations and the savings and increased … Audit Trail - http://www.approva.net/audittrail […]