40 outsourcing risks you need to know now

Outsourcing strategy risks

1. Outsourcing undesirable functions versus the ones that provide greatest competitive advantage.
2. Not clearly defining goals and objectives before starting the outsource process.
3. Not establishing an effective internal baseline to measure providers against, including costs, service and value adds.
4. Outsourcing in the international market without international operations experience.
5. Inadequate business case development for the outsourcing decision.
6. Making the decision to outsource without complete information on internal costs and processes.
7. Not considering the impact of outsourcing on other functions and areas of risk, such as environmental and regulatory factors.
8. Lack of understanding the human relations and employment law requirements for an outsourcing initiative.
9. Announcing outsourcing before sufficient details have been finalized, creating morale issues.
10. Lack of risk analysis and risk assessment planning.

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