Outsourcing is the process of contracting out certain aspects of a business to an alternative company as a means of working to reduce the overall costs incurred by the business.
A computer manufacturer may outsource the creation of certain components to another company because it is cheaper for that other company to make them, as opposed to making the components themselves. A government entity may find that it is cheaper to outsource their tech support to another organization as opposed to keeping IT professionals on staff, and a small business owner may decide that it makes the most sense to outsource their human resources department rather than to create one of their own for only a few employees.
Regardless of the type of outsourcing being completed or the type of company looking to outsource, there are several different factors that must be considered, outside of the cost, when looking into this decision.
Factors for Consideration
The first factor the company needs to look into is cost. The question of whether or not the company will save any money, in terms of their overhead or operating expenses is a key factor in business decisions. If the company will not save any money by outsourcing, then there is really no point in proceeding. If the company will save money through using outsourcing options, the company must then look to factor two.
The second factor a company must consider is whether or not there is an available company willing to take on the outsourced role, and whether or not that company is reliable. Research must be completed regarding the validity of the company and, more importantly, the types of checks and balances that the organization has in place in order to ensure the safety of the data they will be handling.
Studies have shown that 63% of data breaches occur as a result of outsourcing, and most companies do not even know the breach has occurred, that is, until they are notified of the breach by a third party. (Guess who is responsible for the breach? Not the company being outsourced to, the company who was responsible for maintaining the data in the first place: YOU.)
If the company looks legitimate, and if the company does not have any past complaints for data breaches, and if your company can afford to outsource, then go for it. If none of these aspects meet your expectations, however, it’s best to nix the idea altogether.
You are Responsible
Always remember, you are the one responsible for the data, regardless of whether or not you outsource a role. If you can’t afford a data breach, chances are you can’t afford to outsource. This is not to say that all outsourced departments or companies are horrible, but rather that there is simply not enough oversight in order to properly regulate this type of transaction as of yet.
As the old saying goes: “you get what you pay for;” if you can’t afford the potential consequences of using a lower cost alternative, you can’t afford not to have the standard measures in place.
Image Source: Workhoppers.com. (2013). Outsourcing. Retrieved from https://workhoppers.com/blog/wp-content/uploads/2013/05/outsourcing.jpg