Cost-cutting is important for many businesses seeking to maximize their profits. outsourcing certain business functions is a viable way to reduce costs without compromising the quality. Expert outsourcing firms take up certain duties which help in freeing up the company to focus on its core businesses.
However, a high number of outsourcing fails because of mistakes in the process. Some of the major mistakes are as follows,
1. Overestimation of Costs
One of the biggest mistakes is the overestimation of cost savings. Hiring people and building an in-house department is of course expensive but the main point is to keep in mind the organization receives what it pays for. Managing the relationship itself takes time. Performance measurement to ensure compliance with standards and stepping in to handle unusual situations etc. Assuming to receive more than 70% of the estimated cost savings will be a surprise. NOKAAF believes in quality is at the heart of every outsourcing service provided.
2. Lack of documentation
The majority of the task to be outsourced must be outlined by procedures, rules, and guidelines and the problem with many companies is that they lack such things in writing. We here at NOFAAF provide outsourcing services documented in the form of well-written contracts.
3. Reliable Outsource partner
If the outsourcing firm goes out of business or spikes in your organization activity which the outsourcing firm is unable to handle. The organization should have a lot of what-if scenarios available. NOKAAF is a stable firm in Dubai with a large client base and ready to provide services in the long term.
4. Exit plan
There must be a written strategy for exit in case of failure to meet standards or maintain sufficient capacity. This is also important simply if you want to discontinue the outsourcing services. NOKAAF always has contracts carefully written to include responsibilities of both and exit strategy.
5. Confidentiality and data security.
There are more chances for a company to hack in case of outsourcing. Security agreements with the outsourcing organizations must be there. NOKAAF believes in confidentiality being at the heart of its services. Accountants are bound by their professional bodies strictly to follow confidentiality.
