Outsourcing ethics: profitability and reduction of risks
When it comes to the ethics of outsourcing, matters become more complicated, as parities involved are continents away. A judicious choice between the right and the wrong person to do business with will determine the future of your outsourcing venture. Though business relationships are more economic in nature, their moral and ethical dimensions have an equal impact on profitability.
Business with ethical organizations
Whether personal or professional, not many of us will want to associate with unethical individuals. It makes a lot more sense to do business with ethical organizations as it has a direct influence on the overall functioning of a business. Ethical compliance presents a strong public image and upholds the integrity and character of an organization.
Crisis
The way your outsourcing partner reacts during a crisis is the best indicator of whether it is ethical or unethical. Ethics creates a space for itself and ensures the smooth running of businesses. When there is mutual trust and responsibility towards each other, a crisis management mechanism will automatically evolve.
Ethical view point
The association becomes easier when the parties have a legal, moral and ethical obligation to comply with the agreement, with due respect to international law. Legal perceptions may differ from one nation to the other and ambiguity could arise when a dispute occurs, leaving both parties in a fix.
Confidential Information protection
Confidential information security is important in outsource ethics. Privacy and security fall under the 'no compromise zone'. Sujoy Chohan, a consultant at IT research specialists, Gartner Company says, "If there is any industry which is investing in security tremendously, it is the offshore industry, whether it is India or elsewhere". Chief Privacy Officers are highly concerned about proper information security practices. If your outsourcing partner does not have adequate information security measures, it might be wise to stay clear of them.
Identification of the outsourcer
Everyone claims to be ethical. Though a clear definition of the parameters for identifying organizations with ethical conscience will be a difficulty, some factors are vivid. An outsourcer identifies organizations which are doing ethical business.
Trustworthiness of Vendor
Weigh the dependability and reliability of the organizations to which you want to outsource. It is nothing but trust that makes someone want to outsource. A clear definition and practice of the ethical rules and privacy policies of the organization like non-disclosure of trade secrets, secrecy and non-disclosure contracts with staff, third party service providers and visitors is a prerequisite. This will reassure the outsourcer that it is safe to do business with a partner who is miles away. It is an important thing.
Reliability of the Employee
Organizations that implement tough employee credibility measures have a direct implication on its outsourcing ethics. Information security will largely depend on the people who handle the information.
Contact
When a project does not go the right way, an ethical partner will always keep you informed of the problem and possible solutions and time needed. Clear and open communication channels are another sign of an ethical company.
Investigation
Talking to the employees and references will give a clear idea about the professional approach of an organization. A thorough enquiry should be made about the organization and their nature of work management.
Confirm that your outsourcing partner got the following requirements:
1.Presence of a whistle blower
2.Appropriate programs to protect the trade secrets of its clients, partners and their customers
3.Proper arrangement with third party service providers
4.Training and upgrading the security skills and awareness of employees.
5.Safety of electronic data storage
6.Infrastructure
7.Proper information security systems
Risk Reduction in offshore outsourcing
In the long run, the overall cost will prove to be much lower when you are working with an ethical partner.
You can always find companies that offer services at very low costs. An ethical concern might seem to be a costlier choice. However, the price difference could be deceptive as the variation will only be in the initial cost. Before making an outsourcing decision, the outsourcer should also be clear about the responsibilities that he should share.
The following are the aids for your to build a healthy relationship:
1. Manage expectations
2. Openness to intermediate scope and price review
3. Last agreed document should be the basis
4. Willingness to discuss
6. Build flexibility to contracts
Conclusion
The benefits of outsourcing are sure to show up with safe outsourcing practices. Make sure that all the loop holes which can disrupt the outsourcing process are dealt with.
