40 outsourcing risks you need to know now

Outsourcing management risks

1. Not considering the full impact of an outsourcing agreement on a company's financial condition.
2. Lack of internal communication.
3. Lack of incentives for provider continuous improvement.
4. Not establishing multiple touch points between the company and the provider.
5. Lack of a contingency plan for major disruptions at the service provider.
6. Not putting a full communication plan into effect including escalation processes, regularly scheduled meetings, review periods and employee communication.
7. Doing a poor job managing expectations around the go-live.
8. Expecting too much from a provider in the early months after go-live.
9. Neglecting to "flex" the outsource relationship as outsource requirements evolve.
10. Lack of a formal "lessons learned" roundtable on outsourcing in general and, specifically, established outsource relationship.

Excerpted from The Supply Chain Handbook (Tompkins Press, 2004), edited by James A. Tompkins, Ph.D., and Dale Marmelink. www.tompkinsinc.com