8 Key Steps To Minimize The Risk Of Outsourcing

Companies are using outsourcing as a way to deliver projects while reducing costs and resources. Outsourcing is a great solution for companies that want to cut costs, focus on their core areas, and/or gain expertise.

Although companies find it difficult to delegate part of work to third parties because of risks associated with it. Protect your next outsourcing project by looking at the key steps to help minimize the risks associated with outsourcing.

Table of Content

  1. Disclosing Business Goal
  2. Ensure Confidentiality
  3. Prepare Detailed Inventory Of The Processes
  4. Discussion Of Critical Issues
  5. Clear Communication
  6. Check Results And References
  7. Be Flexible And Adaptable
  8. Establish Quality Standard And Performance Indicators
    1. Disclosing Business GoalCompanies that rely on outsourcing as well as outsourcing service providers can mitigate risk by being fully transparent, flexible and direct in their partnerships regarding goals, shared responsibilities-authority structure. Company’s goal is to find an outsourcing service provider who is as committed to quality as you are.
    2. Ensure Confidentiality
      Companies with sensitive data want to work with outsourcing providers they can fully trust, so BPO companies need to implement strict security measures to avoid leaking personal data. In addition, companies can apply various security measures to minimize the risk of outsourcing like signing a non-disclosure agreement with the service partner ensuring company’s information to be kept confidential. 
    3. Prepare Detailed Inventory Of The ProcessesWhen planning to outsource, it is best to first make a list of operations. Once you have compiled a list of outsourcing tasks, you need to choose the right service provider. You should only hire a third party company if they can provide you with a reliable solution to your business problem, not just the means to solve it.
    4. Discussion Of Critical IssuesUnderstanding your concerns early on will help you formulate a plan for evaluating outsourcing options. Many of the risks associated with outsourcing software development can be mitigated with careful preparation and planning so that outsourcing can pay off and make your experience a profitable one.
    5. Clear CommunicationOne of the most common mistakes that companies make when outsourcing software development activities, or in fact any activity related to their business processes, is the lack of clear and consistent communication. Lack of communication and visibility can increase the time it takes to complete a project.
    6. Check Results And ReferencesAlthough part of the business process is outsourced, it is best to always understand the key personnel of the offshore team, such as project managers, team leaders, and architects. Once you are satisfied with the results of the research and technical testing then decide to continue working with the particular outsourcing company.
    7. Be Flexible And AdaptableBusiness environment is dynamic & keeps on changing constantly. These changes affect the firm and the service provider in different ways. Thus it is essential that the selected outsourcing model and processes are also kept flexible for any changes.
    8. Establish Quality Standard And Performance IndicatorsIf the service provider is not well managed, it’ll affect the quality of outsourcing services. A good outsourcing company in India will definitely contact you, inform you about the progress of your project and any setbacks it’ll face, etc. You must have a written agreement between you and the outsourcing company before providing any information or starting a project.


If you can manage these factors early on, you’ll have a hassle-free outsourcing experience. Managing these factors early on will help streamline the outsourcing process. These tips can help you avoid problems, fix them quickly, and facilitate knowledge transfer, ultimately making your outsourcing arrangement effective.

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