Women in built
DOES BUSINESS PROCESS OUTSOURCING MINIMISE RISK AND UNCERTAINTY ?
By Tennille Bell , national general manager : sales at Programmed Process Outsourcing
Companies can face risk from every angle – be it supply and demand , health and safety , labour relations , or change management .
Non-compliance or failure to mitigate risk can have enormous consequences , but how can organisations mitigate and manage risk without taking too much time away from core business functions ? With business process outsourcing ( BPO ), enterprises can delegate one or more of their non-core , time- or resource-intensive functions to a specialist external provider who owns , optimises and oversees these based on defined , measurable performance metrics .
NON-COMPLIANCE IS RISKY BUSINESS With such a high legislative compliance burden on most industries , risk mitigation is important from both a strategic and operational perspective , but this is no small ask for most businesses .
Considerations like financial risk , liability risk and even reputational risk can be overwhelming , but when a company suffers a reputational loss , it also loses its competitive edge along with customers . This results in decreased profitability , and depending on the severity of the risk materialising , could even result in an inability to continue operating . What does all of this mean ? Compliance and risk management cannot be ignored or overlooked .
Through BPO , enterprises can relieve the pressure of compliance on their internal resources and benefit from delegating the risk to an external specialist enablement provider when outsourcing one or more of their business functions . Organisations that manage their risk effectively are better equipped to avoid the risk entirely , or pre-emptively implement action plans to overcome the incident as quickly as possible to minimise negative impact .
WHEN RISK BECOMES A PROBLEM Businesses that do not manage risk and compliance in an ongoing manner are more likely to miss warning signs and become ill-equipped to handle risk events as they arise . In such cases , organisations have reached a point where the risk is no longer just
SeeFromTheSky | Unsplash a risk , it ’ s an actual problem with moderate to severe effects on the organisation depending on that particular risk event .
An inability to roll with the punches leads to process inefficiencies , a decrease in productivity and poor quality products . This is a snowball rolling downhill , gathering momentum through poor customer satisfaction , loss of competitive edge and ultimately , decreased profitability .
RISK CAN BE OUTSOURCED The biggest drawcard to BPO for businesses is that all risk and responsibility for outsourced functions lie with the BPO provider , who becomes an external contractor performing that function
Business process outsourcing enables all risk and responsibility for outsourced functions to be transferred .
www . refrigerationandaircon . co . za RACA Journal I July 2022 45