Reducing Expenses May Not Reduce Risk
More and more companies are looking for ways to reduce expenses and a popular method recently has been outsourcing. While many benefits come with an outsourced relationship, so does increased risk. Proper due diligence and carefully crafted service level agreements are essential. However, with the recent fraud at Satyam in India, those activities may not be enough. A recent article in CFO magazine highlights the problem. Here is a excerpt from that article.
The enormously inflated cash balances at Satyam have popped a hole in the reputation of the outsourcing market, which has grown from business offering solely tech business, to back-office work such as finance and accounting. “This has really shaken up the outsourcing industry,” says Peter Allen, a partner and managing director for outsourcing advisory firm TPI. “The industry is built on relationships that imply some level of trust and confidence and integrity.”
How comfortable are you with your outsourcing partner? Have you assessed the risks with the relationship lately? If not, Wheelhouse Advisors can help. Visit www. WheelhouseAdvisors.com to learn more.
