Outsourcing

Question 1

Why do we outsource?

Answer 1

1. Streamline operations
2. Cost control
3. Freeing up resources for other work
4. Improving quality and service
5. Resources not available internally.

Question 2

What systems and controls are required when outsourcing?

Answer 2

1. Fit with existing organisational reporting structure.
2. Agreement allows monitoring and control of operational risk.
3. Appropriate due diligence of the service provider’s financial stability and expertise.
4. Smooth transition of operations from current arrangements.
5. Concentration risk that may arise from using a single provider.