The Financial Independence Retire Early (FIRE) Movement
In the previous article, we learned about financial freedom or financial independence. However, in the traditional financial planning world, financial freedom was only considered to be a goal that is to be reached towards the end of one’s career. The general opinion was that financial freedom has to be reached when a person has attained […]
What is Scatter Plot ?
A scatter plot is a graphical tool. It has been designed to ensure that it provides a convenient view of the process to the manager at a single glance. The scatter plot studies the correlation between the important variables. When it studies the correlation between two variables, it is called a bivariate scatter plot. When […]
Brand Extension – A Success or Failure ?
Brand management has become quite a challenge for brand managers as well as the Organizations today. Intense competition and the decreasing product life of a brand add further dimensions to the brand management problem. Brand managers by and large opt for brand extensions now days. You can check any shelf in the super market and […]
Time Management Skills
The judicious use of time by an individual to succeed in all aspects of life refers to Time Management. Time Management not only helps individuals to make the best use of time but also ensures successful accomplishment of tasks within the stipulated time frame. It is essential to do the right thing at the right […]
Important Decisions Influenced by Cost Modeling
In the previous article, we studied the cost modeling process. We understood the various steps which have to be undertaken in order to model costs. However, we also need to understand that cost modeling is an iterative process. This means that a company creates a cost model, runs the numbers, compares those numbers with their […]
Managing risk efficiently and effectively can be a determining factor in the overall success of any organization. Most of the companies try to develop a risk management plan on their own and some outsource this function.
Outsourcing risk management function is not a new concept and is being widely used by many organizations nowadays. However, contracting out risk does not guarantee an organization’s success at all but yes; there are greater chances of success. Reason being, the program is designed, developed, implemented and reviewed by risk management professionals and therefore, can improve the quality of your overall plan.
Outsourcing may or may not be necessary. There are several factors that influence this decision including type of firm, type of risk, company’s current financial status, interior and exterior business environment and level of human intellect.
If company possesses and retains intellectual and knowledgeable people, requirement of outsourcing risk is less. But if, it is an entirely different situation to deal with or company does not possess that level of people, chances of hiring services from outside increase.
Outsourcing or contracting out non-core services may deliver good results and substantial benefits to the organization. In today’s world, any company can employ external sources and utilize their specialized services. The main benefit is that it reduces your cost as well as saves your time. You no longer need to employ all your resources for this particular task.
Once you outsource risk, the routine work within and outside the organization will not be affected. Moreover, it will save your human hours. In addition to this, these specialized services are far less expensive than an in-house risk management plans. So, in wider terms, contracting out risk management can give you triple benefit.
Even after considering all above advantages, outsourcing risk is still a critical decision and needs careful considerations and planning. Unbiased advice from experts is one of the most essential requirements so that they can advice you if you really need to develop a risk management plan or if it so, should you purchase external services. There are several companies offering such specialized services. The need is find one that understands your requirements and suits your budget. Therefore you need to decide before something terribly goes wrong.
Another major issue is that controlling risk is not always required. Sometimes, you can simply let it go. But it doesn’t mean to be careless about it. It simply means you don’t need to develop a full-fledged risk management plans. Initial two-three steps can help averting risk.
A defensive strategy can prove to be extremely useful in some cases. It not only saves your efforts but also your time, money and human resource. If you require only minor alterations avoid contracting out.
Outsourcing risk has its own advantages and disadvantages. The major advantages are:
On the other hand, the process itself can be very risk as you may need to disclose the confidential information to the outsourcing firm so that they can better understand the current standing of your organization.
It may also bring undesirable changes in your company. The need is to keep a check on outsourcing companies and taking a note of their activities.
Your email address will not be published. Required fields are marked *
