Do you have an effective understanding of your Outsourcing process risks?

Common challenges and Issues:

• Difficulty for executives to assess comprehensive outsourcing risks.
• Products and services not delivered on time by outsource providers, with no clear answers on Service Level Agreement accountability, or clear answers the reasons for service delivery failure.
• Employees do not understand their new job responsibilities, or how their roles integrate into the goals of the organization.
• Control has been lost to the outsourcing provider due to a lack of knowledge of business processes.
• It is difficult for the outsourcing company to monitor outsourcing activities or to assess outcomes.
• There is a need to reduce the time and effort spent on collecting and compiling data necessary to manage the outsourcing process.
• Lack of overarching outsourcing management and governance structures.

Establishing a shared service center or entering into an outsourcing relationship is often a key part of most organization’s modern business strategy. The risks are increasing as the scope and complexity of outsourcing relationships becomes more comprehensive, and the decisions become more complex.

Many viable sourcing alternatives exist – outsourcing, joint ventures, captives, onshore, offshore, near shore, and in-sourcing. Organizations that commit to a sourcing strategy and contract a sourcing provider create risks which need to be actively managed. Without a strong management and governance capability, executives and managers will not have the ability to adjust and manage performance.

Business functionality can be outsourced, but the risks can never be outsourced. Executives need a clear understanding of how these can impacts their organizations risk profile, from comprehensive operational, process risk, to regulatory compliance/approvals and political risks. Milton Alexander helps develop an approach to maximize global sourcing value, and provides a comprehensive structure for minimizing and mitigating risks.

How can we support you?

Identify comprehensive outsourcing risks, and provide mitigation strategies throughout the stages of the outsourcing lifecycle:

• Planning Initiatives and Program Management
• Strategic Planning
• Cost and Performance Analysis
• Provider Selection
• Negotiating Terms
• Resource Transitioning
• Relationship Management

Strategy and Alignment:

• Creation of strategy maps, balanced score cards, and KPIs for the outsourced functionality. (see Corporate Performance Management)

Process Design / Redesign:

• Process mapping with key success factors and controls identified.
• Business processes mapping, and the creation of benchmarks and a for issues escalation and management of the outsourcing relationship.
• Utilize the ARIS Solution for Process-Driven SAP Management to provide support for strategy and requirements analysis, translating corporate strategy to business processes, and business processes documentation.
  (see ERP & Systems Controls Compliance)
  

Vendor Relationship Management:

• Integrate data from ERP systems into SLA governance and management reporting.
• Provide outsourcing reporting and dash boarding.

Privacy and Security:

• Define and limit access in ERP systems for outsourcing providers. (see Business Process & Systems Integrity and download the RBAC whitepaper)
• Analyze, and mitigate the risk of data exposure and loss in the outsourcing relationship. (see Data Loss Prevention Business Advisory)
• Create an automated method of both assessing privacy risk, as well as manage privacy governance (see Privacy, PrivacyMAP™, and Data Mapping)

Automated Outsourcing Management utilizing the COGS™ application (see COGS™)

• Identify responsibilities of assigned departments and individual positions in the terms and conditions of the outsourcing contract, and role map those responsibilities into the transparent, timely, and globally accessible COGS application.
• Create and manage a comprehensive outsourcing risk solution using the COGS™ application, populated with proprietary Milton Alexander global outsourcing risk templates.