Service providers: Put your money where your mouth is
With all the hype about outsourcing, it sometimes overshadows the fact
that it involves a lot risks on the part of the client.
To reduce the amount of risks involved, the outsourcing guru of banking
group Lloyds TSB advises clients to look into the financial stability of
their service providers.
More importantly, Sharon Harmer advised companies who attended the recent
Outsource World conference in London to review their outsourcing contracts
to ensure that there is a mechanism favorable to the client in case of
service disruption on the part of their service providers.
"Disruption" meaning in the event of a natural disaster but more
importantly, financial disaster which is something more predictable on the
provider's part.
Moreover, Harmer also suggested that the company itself should be more
pro-active in monitoring the performance of their service providers and
even dedicate some of its people to doing so.
Nonetheless, she noted that outsourcers need to have realistic
expectations about how much the supplier will be able to improve the
quality of a service that was previously run in-house.
Outsourcing, after all, is a matter of meeting expectations, albeit,
realistic ones. It's best to outsource smart, not cheap.
related stories, by category:
