Picture of Daven Michaels

Daven Michaels

New York Times Bestselling Author, 30-year business veteran, and Executive Chairman of CurrentC Group.

While several companies are already benefitting immensely from outsourcing, some are still caught in-between decisions, to outsource or not to outsource. No doubts, outsource services come with certain risks just like any other aspect of business and life in general. But the good news is this; inherent risks from outsourcing are highly controllable.

The major risk associated with outsourcing is delivery failure or poor quality service. These major issues can be handled simply by using reliable outsourcing company to get the most qualified provider. On the part of poor quality service or failure to deliver, a strong contractual relationship will help provide adequate compensation when agreement is breached.

Generally, the benefits that come with outsourcing outweigh the risks significantly.

Combating the Fear of the Unknown

The fear of the unknown tends to deprive some companies or individuals from taking advantage of outsource services. These companies are usually concerned about limitation in monitoring the outsourced services sufficiently. They strongly believe it is more practical to manage and supervise the activities and performances of in-house employees. So, they pay deaf ear to outsourcing regardless of the huge savings plus quality services available through outsourcing. Some of these organizations conclude that it takes an eagle eye to supervise and appraise the performance of overseas employees.

The simple tactic that companies have been using to achieve successful outsourcing is strong contractual relationship. The existence of a contract is sufficient to provide the required peace of mind when outsourcing business tasks. You are sure to get sufficient compensation in the event off loss stemming from poor quality service or complete failure to deliver. Both the client and the provider are bound by the terms of the contract.

Also, profound selection of a provider is one of the best ways to hedge against outsourcing risks. If you hire a provider who is an authority in the area outsourced, you will not fear about the outcome of the service. This is why experts recommend reputable outsourcing company. So, strong contractual obligations, thorough vendor selection and well-structured performance measurement tool would help any organization achieve optimum result with outsourcing. Consequently, the outsourced project is managed effectively, as though the employees are operating from your office.

A company should take its eyes off the potential risks inherent in outsourcing, and focus on the numerous benefits which include massive cost saving, access to better skill, improved risk management, reduced time to market, enhanced capacity for innovation, gaining wider audience and more.

Therefore, contracting outsource services is a worthy course for any company. An organization is able to refocus on its core competencies when other business functions are outsourced to external experts. Offshore outsourcing has become more popular than ever.

Daven Michaels is a New York Times Best Selling Author and CEO of premiere global outsourcing company, 123Employee. The company employs hundreds of young bright individuals on three continents. His International event, Beyond Marketing Live! inspires entrepreneurs to build & grow their business with revolutionary new theories and systems allowing them to design the business and personal lifestyle of their dreams.


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