The main three kinds of risks involved when outsourcing a project include:
- Operational risks: Operational risks arise due to failure to achieve desired quality, cost reductions and speed of process execution.
- Strategic risks: These risks are related to security and privacy issues.
- Composite risks: These are long term risks involving loss of capability or talent to perform business process in house in future.
Practices to Reduce Operational Risks in BPO
Operational risks can be classified as process, technology and people risks. These types of risks are almost inter-related. Good or bad performance of one affects performance of others. Here are practices which facilitate control of operational parameters.
- Process Risks
Process risks are classified into two categories:
- Qualitative Risks:
- Quantitative Risks:
- People Risks
- Technology Risks
For making sure that technology issue might not disturb daily operations, technology metrics should be monitored periodically. These metrics include system up-time, application time, network up-time etc.
As business process outsourcing promises to provide greater profits, cost reductions and improved operational efficiency. However BPO companies need to take in account the risks tied with outsourcing process so that clients can fully realize benefits of outsourcing their processes.