12 Questions You Should Consider to Minimize Risks and Maximize Benefits

12 Questions You Should Consider to Minimize Risks and Maximize Benefits

Before you bring in a third party to run parts of your business, you should pause and consider the risks. There are many success stories of business that have used outsourcing to achieve dramatic savings, shed themselves of expensive assets or build the capacity to grow in a way that would not have been possible using in-house resources.

Outsourcing is becoming a permanent feature of business life. As companies are searching for more effective and cheaper ways of working, handing over non-core functions to lower operational costs can be an appealing prospect.

So how do you become one of these success stories?


Whether you are considering onshore or offshore, Business Process Outsourcing (BPO) or IT Outsourcing (ITO) or both, Extenda can help you understand the benefits, costs and risks of the potential outsourcing deal and how to respectively maximize, minimize and mitigate these. 

Here are the six stages that you will go through during your outsourcing journey. In addition, there are 13 points to consider during each phase in order to control the efforts.

The six stages can be defines as follows:

1. Assess: Define outsourcing objectives and assess your capacity

2. Prepare: Outsourcing service level definition and RFP creation

3. Evaluate: Response evaluation and supplier selection

4. Commit: Contract development and finalization

5. Transition and Transform: New service implementation

6. Optimize: Ongoing supplier and vendor management

Business Case: Why are you considering outsourcing? What will your business gain when you use an extended team? What risks and benefits are out there? Change Management: How will the impact of such change be managed?
Process and Scope: Which areas of your business can be outsourced? What will be the scope and what process will you follow to guarantee a smooth collaboration between core and extended teams? Location Management: Which locations will be sourced? How will you manage the physical distance between core and outsourced/extended team members?
Deal Structure: How will the service level agreement look like? Tax: How will the tax structure be optimized to support the outsourcing deal?
Vendor Management: What sourcing options do you have out there? How will third party vendors be engaged and managed? Security & Control: How will the organisation ensure policy and procedures are followed? will you sign a Non-Disclosure Agreement (NDA) with your vendor?
Operating Model: Will the structure of your organisation change when you start outsourcing? Regulations & Data Privacy:  How will you make sure your data is protected and intellectual properties are not compromised when you outsource work to third party vendors?
Technology and Tools: What change to the technology landscape must be made? Transition and Transformation Planning: How will the project transition and transfomation elemented be planned and managed?


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