1.

Security Issues
If you’re outsourcing something where information systems are involved, there are
communication and privacy issues. It’s harder to maintain security over your data when the
information system isn’t even in the same country. As countries have different security
requirements, it may be even harder to keep your data secure. Hackers can use the internet to
enter servers the same way you use the internet to access your data.

2. Decrease in quality: One of the imperative risks of outsourcing is a decrease in quality of work.
Not because the workers overseas are any less talented or hard-working (contrary to popular
beliefs), but rather because the BPO firm may not have the passion to provide their out most
quality to their clients to ensure success.

3. Lack of communication: You can’t see the people, who are working for you when you outsource,
so the only way to fully know that your work is being done in a timely manner, with no issue
arising is communication. Unfortunately, this is something many BPO companies may not do
adequately, even when they are working on your project just fine. There is also the risk that
when something is going wrong the firm will not communicate thoroughly about the issues and
you only get to know it when its too late.

There can be communication gaps between the client and vendor companies due to various
reasons. There can be misunderstandings and missed messages. Also, both companies may
adhere to different standards of services and this can also create friction between the two.

Language barriers are a real issue if your company chooses to hire BPO organizations outside of
your country. This can delay new processes and reduce feedback from various departments.
Ultimately, it could shine a light on bigger problems within your processes and operations. If you
have customer-facing services, these language barriers may be an issue for third-party vendors

4. Loss of visibility and control: Ofcourse with outsourcing, you loose visibility of what is being
done and also the control of the work to a certain extent.
 5. Loss of compliance: Lastly, The outsourcing company may not conform or follow the compliance
rules that are mandated in your country or in your industry, this can be a huge risk in certain
areas of business.

6. Data Security: There is always a risk of data security breach when outsourcing. Thus, it is
always recommended to have NDA’s being signed with the outsourcing firm and to check what
prevention steps they have against any security breaches that might occur.

What are the risks of BPO?

BPO risks include the following:

Security breaches. The technology connection between the hiring company and the BPO provider
creates another point of entry for bad actors, as organizations often need to share sensitive and
regulated data with their service providers.

Regulatory compliance requirements. An organization’s regulatory requirements extend even to

outsourced work, so it must ensure that the vendors it hires align with the laws the organization must
follow and that the vendors adhere to the rules that govern the organization’s outsourced work.

Unanticipated or higher costs. Organizations can underestimate the amount of work that needs to be
done, which can lead to higher costs than anticipated.

Relationship challenges. Organizations can face communication problems with their outsourced
providers, or they might find that there are cultural barriers.

Overdependence on the external provider. An organization that outsources a function or service is

tethered to the partner that performs the work. The organization must manage that relationship to
ensure key objectives are met at the agreed-upon cost. If not, the organization may find it difficult to
bring the operation back in-house or even move the contract to another outsourced provider.

Increased potential for disruption. An organization must monitor for issues that could interrupt or
permanently end the relationship with an outsourced provider. These include financial or workplace
problems at the outsourced provider, geopolitical instability, natural disasters or changes in economic
circumstances. Organizations must consider such risks and devise strategies on how to cope, which, in
turn, adds complexity to their business continuity and disaster recovery.

Even after all this risks, there’s a large reward when outsourcing is done right with the correct BPO
partner. So, it is imperative that businesses that are looking to outsource finds the right fit for their firm
to partner up with, to ensure success.