The Business Model of Amazon
Investors just can’t seem to get enough of Amazon. Even though Amazon is already the world’s fifth-largest company, investors believe that it is only just getting started! It already has revenues of $125 billion per annum. It is targeting revenues of more than $500 billion in the next few years. Startups have grown at this […]
Evaluating the Effectiveness of Sports Sponsorships
In the previous article, we have already seen how multinational companies spend large sums of money in order to buy the rights to be associated with a large sporting event. Companies are willing to provide these resources since they feel that they will be able to meet their corporate objectives. Sports sponsorships are purely commercial […]
ERP Vendors and their Products Catering to Different Verticals
During 1990, ERP market was dominated by few vendors namely SAP, BaaN, Oracle, People Soft and JD Edwards, who were also known as big five of ERP market. The market was, then, was growing at compound rate of approximately 35%. Fortune 500 companies were the major customers. Key focus of ERP vendors, during that period, […]
Departments as Fundamental Units of Administrative Organizations
The line agency in its traditional form exists as departments. Departments are the fundamental unit of administrative organizations and carries out all the functions. There are different shortcoming and problems associated with this structure as well but before we dwell into that, we shall make an attempt to understand the basic principles on which the […]
Internet and Email Etiquettes – Netiquette
Etiquette helps individuals behave in a socially responsible way. In simpler words, etiquette transforms a man into a gentle man. Remember employees need to behave sensibly and appropriately to make their position secure at the workplace. No organization likes to have someone who lacks etiquette. Respect the place where you earn a living for yourself. […]
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 *
