Money Matters: Avoiding Surprise Costs
One of outsourcing's biggest risks is hidden expenses. While it may seem cost-effective at first, unexpected fees can quickly pile up and strain your budget.
These stealth costs include:
- Extra charges for services outside the initial agreement
- Expenses tied to managing and communicating with the outsourcing team
- Transitioning work to the outsourcing group
- Quality issues needing rework or more resources to fix
To reduce financial risks, thoroughly vet all costs upfront. Make sure they're clearly spelled out in your outsourcing contract. It's also smart to build a buffer into your budget for unforeseen expenses. Remember, indirect procurement can eat up 10-18% of revenue in some sectors. Careful planning and budgeting help keep costs in check.
Data Security and Confidentiality Risks
Outsourcing often means sharing sensitive company data with an external partner. If not handled right, this creates big security and confidentiality risks.
To safeguard your company's data and IP, work with an outsourcing provider that has strong security measures like secure storage, access controls and regular audits. Have clear confidentiality agreements to prevent data misuse.
In our experience, the Philippines is well-equipped to address these security worries. It ranked 1st on the 2013 Business English Index with a 7.95 score, beating India and Malaysia. This English skill, paired with Western business culture alignment, helps enable clear security protocol communication.
