Mitigating Offshoring Risks
Every business solution has its own share of pros and cons, and a crucial step to take is analyzing which business strategy will bring the most benefits to the company after weighing the advantages and drawbacks.
Moreover, one effective solution for a company does not automatically mean that it is also the best solution for what you need.
Offshoring is one business solution that has become popular among many companies, but take note that while it is a tried-and-tested process, it also comes with several risks that must be minimized or mitigated.
Here are some common risks associated with offshoring and ways to mitigate them: Communication blocks / difficulties.
Since the client company and service provider are geographically far from each other, most conversations will be done through email and/or Skype video conferences.
Time zone differences will also have an impact in the way two companies communicate with each other.
To overcome difficulties from lack of face-to-face communication, it is crucial to have a dedicated staff who will serve as the first point of contact to relay updates and address problems faster.
Establish a good working relationship by having meetings on a regular basis and providing a weekly report about the status of the project.
Unclear client requirements.
In offshoring, or any business solution in general, the first step is requirement analysis.
Identify exactly what you need or expect and the service provider will analyze your requirements and inform you how they are going to meet them.
If the client's requirements are unclear, how can you expect to get the deliverables that you need? To avoid having to deal with this kind of scenario, start the offshoring process with detailed project requirements.
It does not stop at a project brief or overview.
Both parties must understand what is expected from each other before doing the actual project.
Protection of intellectual property / Data security.
Giving a third party service provider access to your computer system/s or sensitive data increases the level of security risk.
Minimize the risk of data and/or identity theft by sharing only what is necessary.
Pay close attention to your service level agreements and privacy issues such as licensing and ownership of source code created in the duration of the project.
Both parties must also be aware of their responsibilities in case data security issues arise.
Be aware that there are risks involved in offshoring, but you can do something to mitigate them.
The client and service provider must work together to ensure that projects will be done effectively, risks are kept to a minimum, and a good business relationship is established.
Moreover, one effective solution for a company does not automatically mean that it is also the best solution for what you need.
Offshoring is one business solution that has become popular among many companies, but take note that while it is a tried-and-tested process, it also comes with several risks that must be minimized or mitigated.
Here are some common risks associated with offshoring and ways to mitigate them: Communication blocks / difficulties.
Since the client company and service provider are geographically far from each other, most conversations will be done through email and/or Skype video conferences.
Time zone differences will also have an impact in the way two companies communicate with each other.
To overcome difficulties from lack of face-to-face communication, it is crucial to have a dedicated staff who will serve as the first point of contact to relay updates and address problems faster.
Establish a good working relationship by having meetings on a regular basis and providing a weekly report about the status of the project.
Unclear client requirements.
In offshoring, or any business solution in general, the first step is requirement analysis.
Identify exactly what you need or expect and the service provider will analyze your requirements and inform you how they are going to meet them.
If the client's requirements are unclear, how can you expect to get the deliverables that you need? To avoid having to deal with this kind of scenario, start the offshoring process with detailed project requirements.
It does not stop at a project brief or overview.
Both parties must understand what is expected from each other before doing the actual project.
Protection of intellectual property / Data security.
Giving a third party service provider access to your computer system/s or sensitive data increases the level of security risk.
Minimize the risk of data and/or identity theft by sharing only what is necessary.
Pay close attention to your service level agreements and privacy issues such as licensing and ownership of source code created in the duration of the project.
Both parties must also be aware of their responsibilities in case data security issues arise.
Be aware that there are risks involved in offshoring, but you can do something to mitigate them.
The client and service provider must work together to ensure that projects will be done effectively, risks are kept to a minimum, and a good business relationship is established.
