Outsourcing work to third party vendors always had an element of risk, and complex work environments and surge in the number of service providers is only resulting in increased threats for companies.
There can be potential risks in different areas of an outsourcing relationship. Data security is one of the most prominent risks that companies face today as there have been numerous instances on data losses. As a result of these happenings, customers are now becoming more concerned about the viability of their service providers and are looking at them with magnifying glasses. Large organizations that deal with multiple third party vendors are even more open to risks.
Areas of Concern
At times, companies enter into outsourcing arrangements without adequate preparation and evaluation. While going for outsourcing, companies do need to protect and secure themselves against the possible threats that may result from such an alliance. This is because instabilities and unexpected events happening at the service provider's end can expose its customer to significant risks.
Another area of consideration is choosing the right outsourcing partner. There are different types of providers in the outsourcing space and many more are coming up. The providers differ widely in terms of their size, services and so on. Thus the decision has to be taken more carefully and with proper evaluation. Also, there are lot of small providers that often do not have a proper security system in place. So the viability and financial stability of such companies is also an important point to consider. Customers, while dealing with such vendors, may probably find that they are not well equipped to meet their security requirements.
Risk management should be a continuous practice and is not something to be taken seriously only in the initial stages. Not all customers do regular tracking of vendor viability and at times, they do it after the deal is signed. Worse than that, most customers do not have a disaster plan to deal with unforeseen and unexpected events. And even when companies have defined internal security policies, it becomes difficult to implement these when dealing with external organizations.
Every company will have different security requirements. While looking for outsourcing options you should analyze your security needs and choose a provider that can offer the desired security levels. Also it is important to estimate the risks involved in different areas of business and prepare in advance. The security personnel should get adequate support and there should be good amount of collaboration to make things work.