Risky Business: Organisational Effectiveness at Managing Risk of Outsourced Projects
Nearly 95 percent of organisations buy, provide or both buy and provide outsourced services and functions, in which they face inherent risks created by new and unforeseen challenges. These risks create the need for a risk management culture that is essential for organisational success. This report seeks to explain how users and service providers identify, assess, mitigate, exploit and manage outsourcing risk, and more importantly, how effectively.
The following are among the highlights of a global survey conducted among more than 600 project, programme, department, senior and executive managers involved in their organisations’ outsourcing projects.
- A lack of foundational skills and processes in risk management results in fewer than half of organisations being able to effectively manage risk of outsourced projects. With nearly two-thirds of organisations spending up to half of their budgets on outsourcing, there is clearly a need to refine risk management capabilities in order to positively impact bottom line performance.
- Organisations do not always clearly define business requirements when outsourcing projects. The lack of developed requirements hinders effective communications between outsourcing partners and the ability to map outcomes of outsourced projects to organisational goals and objectives.
- Vendor management issues rank among the top risks of concern to organisations when outsourcing and are closely tied to their focus on effective contract management. • Organisations acknowledge that training and more information are necessary to meet outsourcing challenges of risk assessment and management. Managing product or service quality is the top risk for organisations which are outsourcing, and just one of many areas in which they say they could use more support.
To access the full resource, please download the pdf file