Most investments come with risks and rewards. The key to successful investments is obvious — the rewards must outweigh the risks. Right? If only business were that simple.
Yes, better processes can lead to greater profits, when they go well. You might be considering outsourcing some of your processes for that very reason but questioning how well it will go. That’s an initial step on the right track of taking measured risks. Let’s walk through the other steps.
Business Risk Management
Risk management is the process of identifying, assessing, and controlling potential business risks. It’s a process that every business should practice to understand the possibility of loss or damage. However, it’s important to remember that the point of understanding risks isn’t to avoid them at all costs. As a former chief risk officer pointed out, “Taking risks is how you grow.” Instead, it is surprises that you want to avoid.
A Risk Mitigation Process
Business leaders can reduce the risk of surprising damage through an intentional risk management process like the one below. (Remember, a process inherently means it’s an ongoing practice.)
- Identify the types of risks that affect your business.
- Perform a risk analysis to understand the potential impact of each.
- Develop a risk register, a “living” document that tracks and reports how individual risks apply to the business.
- Determine your organization’s risk appetite, a measure of how much risk you’re willing to take in pursuit of your business goals.
- Formulate a plan for avoiding or mitigating the risks in accordance with your risk appetite.
- Implement the risk mitigation controls.
- Continue referencing your risk register, assessing your results, and updating your controls.
Risk management consultants and practitioners typically categorize risks into different types. Many types of business risks are well-established, and others are emerging, some of which are considered sub-categories. The process above applies universally to all types of business risk, including those related to outsourcing a contact center and technology. Let’s look closer at both.
Outsourcing Risks
Depending on how essential a contact center or particular technology is to a company’s success, outsourcing these functions can be considered an operational or process risk. Both affect an organization’s ability to operate its business effectively and efficiently.
Outsourced Contact Center Risks
Deploying “outsiders” to manage a critical aspect of your business is a people risk. You are surrendering some of your control and ability to collaborate. For example, you are not facilitating the individual interviews of content center agents, governing who represents your business with that part of customer service and their level of expertise.
We outline additional considerations in our blog “When Does It Make Sense to Outsource My Contact Center?”
Outsourced Technology Risks
A company’s IT infrastructure poses a universal risk category considered technology risk. This includes a company’s existing technology in operation, which may be aging, costly, or unreliable. It also includes new technologies being deployed, which can underperform, jeopardize data, or fail altogether. Poor technology implementation can invite other types of risk: cybersecurity, data, and AI.
Mitigating the Risks
Considering some of these outsourcing risks, let’s apply step five of the risk management process above: Formulate a plan for avoiding or mitigating the risks. The best mitigation plan will include strategic planning, clear expectations, and due diligence — primarily in the selection process.
You want to use a robust process to ensure you select an outsourcing provider through a comprehensive evaluation. For example, avoid an overemphasis on cost saving or efficiency over resiliency. Take into account a provider’s specialties, hiring and training processes, stability, and problem-resolution procedures.
You can ask questions like:
- How do you protect customer data?
- Where would you store our data?
- How do you maintain your systems?
- How do you manage your risk exposure?
- How are you overcoming common industry challenges?
You can also perform “what-if” scenarios to understand the potential impact on your business and customers should a certain event occur.
Once you’ve selected your provider, you want to maintain open and regular communication — the key to every healthy relationship. Align on organizational objectives, procedures, needs, and changes.
Sourcing Strategies and Strategic Insight
While managing risk is an essential process in your business, you don’t necessarily need a chief risk officer. You just need to be a leader who foresees and prepares for the storm. Sometimes, that means involving experts. Deloitte observes that organizations are leveraging third parties to help assess sourcing strategies and provide strategic insight to protect their businesses and keep up with rapid advancements.
AdviseCX can guide you and your business through the process of outsourcing your contact center or technology solutions, ensuring your risks are known and addressed and setting you up with strength and confidence.
