Motivators for Outsourcing
There are many reasons why a company would consider outsourcing their telecommunications function. Some of the main motivators for outsourcing include:
Cost reduction – by having a single outsourced provider managing the entire end-to-end telecommunications function in a business, there is often a reduction in wastage and redundancy, leading to an overall improvement in cost.
Access to core competency – by outsourcing non-core business functions such as telecommunications, a business frees up a lot of internal time and resources which can be re-focused onto the company’s core business.
Talent access – outsourcing the telecommunications function to a dedicated telecommunications service provider means that the company can gain access to specialised talent without having to retain them within the business.
Improved customer experience – by having a more efficient and effective telecommunications system, the business is better able to communicate, both internally and with customers and other third parties. This improves workflow and customer service, leading to happier customers.
Risks of Outsourcing
When a company considers outsourcing its telecommunications functionality there are, however, a number of risks which must be taken into consideration, and managed, in order to gain the optimal results, some of these risks include:
Supplier Selection Risks – it can be difficult to identify the best service providers particularly in terms of financial viability, technical evaluation and risk assessment. It is also difficult to effectively evaluate different proposals against one another.
Outsource contracting and negotiation risks – when outsourcing there is always a risk that the contract will not be negotiated to the full benefit of the business. It is important to be cautious of unexpected expenses or service omissions.
Transition and start-up risks – switching to a new outsourced telecommunications system can be a difficult transition. Products and services may experience supply interruption during the transition and employees will have to go through a transition process where they familiarise themselves with the new system.
Supplier performance risks – perhaps the biggest risk when outsourcing is that of supplier performance and compliance. The supplier should have very well defined roles, with the company doing regular audits of supplier processes, documents and data, to ensure that they are receiving the best possible service.
Managing the Risks
In order to manage the risks associated with outsourcing the telecommunication function in a business, the company should follow a risk management process which looks at:
The balance of risk management with risk consequence – if the company understands the consequences of the risks they are undertaking, they can better prepare for them and are less likely to be caught off guard.
Understand and protect the power balance – when outsourcing a service, a company must be careful not to give all of its power or control away to the service provider.
Develop and use appropriate controls – by putting the proper controls in place the company can better manage the outsourced service provider. Controls such as SLAs can be better for both sides as everyone is aware of what their roles and responsibilities are and what they are responsible for.
Apply risk management throughout the outsourcing lifecycle – it is not enough to just do an initial risk assessment when first deciding to outsource a service. A company should be doing constant risk assessment and management, including legal, compliance and governance audits, in order to mitigate any risks as they arrive.