Discuss About The Risks Management By The Process Improvement?
The Aztec Pvt. Ltd. wants to transform their traditional working system with the upgraded business tactics. The owner of the company decided to outsource their business processes and functionality to the network used by the third party for the management of the data application. After the outsourcing of business operation, it has been analysed that there are IT risks associated with the process of outsourcing. The company is looking forward for the plan to develop a risks assessment matrix which helps in developing proactive action plan to overcome the risks associated with the outsourcing of the processes. The coordination of the functionality should be analysed and taken into consideration to develop the risks assessment plan. The purpose of this paper is to design a qualitative and quantitative research methodologies for analysing the risks and security issues associated with the outsourcing of the organization operational processes to the network of the third party. The focus should also be given on reviewing the impact of outsourcing on the financial sector and the traditional security architecture with the development of the risks assessment management plan.
Outsourcing is the process which helps in enhancing the strategic decision taken for facilitating the cost associated with the development program of knowledge domain to access the organization goal within minimum period of time and cost. The outsourcing of the activities is the tactical decision to enhance the resource management program of the enterprise (Shacklett, 2012). The business activities which are outsourced on the network of the third party are categorised as operation related with the deployment of the helpdesk portfolio, data centre management schemes, and management of the application related to control the business activities and processes. The outsourcing of the activities helps in establishing continuous deployment of procurement process from the third party. The communication between the stakeholders should be effectively managed to formulate the requirement of establishing outsourcing program within the working curriculum of the Aztec enterprise. The integration of processes helps in developing effective system for improving the capabilities of the business operations (Wayne, 2013). The need of outsourcing arises for the Aztec Organization due to the occurrence of following reasons:
The outsourcing of the business activities to the third party involves the development of the outsourcing model with the inclusion of business process outsourcing techniques, outsourcing process for administrative control, service providers used for deploying application, maintenance and development of operation for application maintenance, and the management of IT services. it has been analysed that the services provided by the outsourcing model are categorised as fixing of the procurement support, enhancing and upgrading of the IT services, and development of the new application according to the requirement of the Aztec organization. It is an efficient technology for providing security to the business process by peer to peer management of the activities (Patil, 2013). It is capable of providing security with the help of firewall management system, intrusion detection and prevention system, development of policies and standards for security, and the development of the IT management system. The management of the data centre for remote accessing of the information can be efficiently done with the help of outsourcing program. The inclusion of help desk helps in the management of global hub for the efficient development of the technical hub. The activities which are outsourced by the Aztec organization to the third party are integration of the system development, maintenance of the data network, deployment of the data centre with the use of mainframe, repairing and maintenance program for the application, and many others. The following diagram shows the outsourcing model implemented by the Aztec organization for upgrading its business operational program:
The following activities should be performed for the implementation of business operation to be outsourced to the third party:
The following diagram shows the implementation program of outsourcing the business activities to the third party association
The qualitative and quantitative approaches are used for finding the accurate result of the implementation of the research methodology for collecting data with regards to Aztec organization. The verification of the data collected from the different sources is the preference for adopting the research methodology program.
The implementation of the outsourcing program is the cost effective program for controlling the flow of business activities. The financial activities of the enterprise can be enhanced with the active participation of the outsourcing vendor company. The reputation of the company can be improved with the increasing turnover of the company. The skills of the working employees can be sharpen according to the requirement of the global market to remain in front of the competitors. The competitive advantage can be gained with the utilization of skilled worker in the efficient manner. The satisfaction of the customers can be effectively improved due to the active participation of the customers to specify their requirement specification clearly to the outsourcing company. The follow up of the regulatory compliance of government helps in improving the functionality of the outsourcing company. The reduction in the cost is the major factor to adopt the working tactics of the outsourced program. The good and healthy relationship between the service provider and the outsourcing organization helps in completing the tasks before the baseline. The difficulties of the time completion can be resolved with the effective utilization of the labour and the resources for completing the business processes. The cost spent on running the application and business processes can be controlled with the use of outsourcing program. The competency can be achieved with the inflow of regulatory compliance for the effective working within the government norms. The financial growth of the company can be improved if the outsourcing company can efficiently understand the requirement and business activities forum to get the required output. The on-demand accessing of the resources helps in increasing the compatibility with the offered business activities by the Aztec organization. It has reviewed that the efficient handling of the risks associated with the project helps in efficiently managing the flow of activities.
The security procedures which are used for handling the traditional business functionality have to be changed according to the requirement of the outsourcing programs. The arrangement of the business processes on the outsource environment helps in managing the risks associated with the business activities. The operations are selected according to the requirement of completing the business processes which helps in improving the turnover of the enterprise. The application development program should be arranged for effective utilization of the data centres (Chaudhary, 2013). The intranet and extranet should be effectively employed within the working curriculum of the enterprise to have a check on the business activities by the outsourcing company. The outsourcing of the business processes is mainly done with the aim of reducing the cost of the resources used, overcoming the limitation of the skilled labour availability, the difficulty in hiring the employees from external sources is resolved, the risks of the organization can be transferred to the outsourcing industry, helps in minimizing the risks, the development of the strategic relationship with the supplier, and the project can be delivered within the baseline of the project The focus should be given on the following activities to develop the new security system according to the requirement of outsourcing of the business processes.
The changes required in the traditional security system involve the amalgamation of international standard of security policies and procedures. It helps in establishing new security architecture for the Aztec organization to outsource their business data and processes by maintaining the confidentiality, accuracy, and integrity of data in the transmission process. The legal requirement of the enterprise should comprise with the government regulatory compliance. The privacy of the customer personal information should be maintained. The requirement of the vendor should be fulfilled in the complete life cycle of the project development. The stages mentioned in the service level agreement should be changed according to the requirement of outsourcing of the business process. The contract should be developed for managing the security portfolio throughout the project development life cycle.
The deployment of outsourcing program is equipped with some challenges and risks which should be taken under consideration such as geographically distribution in the company’s location, inadequacy and unclear accountability program for resource procurement plan, no support of delegation, procedures are not completed within the allocated turnaround time, discontentment in the customers and the employees, the cost of resources get increased due to the crossing of the baseline, inclusion of training and development program put extra pressure on the management team, and no solution for data capturing.
The following diagram shows the flow of data for outsourcing the business processes to the third party. The Aztec organization first identifies the requirement or need for outsourcing the business processes and then signs the agreement with the outsourcing third part to carry over the business processes. The Aztec organization checks the quality of the project after the completion of activities by the outsourcing company and delivered the final product to the stakeholder for use.
The following table shows the risks associated with the outsourcing of business processes to the third party for the management of data:
|
Risk |
Description |
|
Inclusion of weak management tactics used by the third party |
The measurement of the performance of the business activities helps in analysing the efficiency of the third party to carry out the business operation. The poor performance indicates that the third party is not efficient in carrying over the business processes. The cost incurred in the activities help in determining the inadequacy of the third party. The focus should be given on the quality and cost management tactics used by the outsourcing party for handling the business resources |
|
Inefficiency in the skilled workers |
The specialist of the outsourcing third party does not have skilled staff to perform the task of the Aztec organization efficiently. This can result in the failure of completing the project on time |
|
Uncertainty associated with the business activity plan |
The planning is the crucial phase of the business management. The inadequacy in the planning process can result into the occurrence of uncertainty which is not scheduled in the project plan which results into risks and delay of the project. |
|
The technology and skills are out-dated of the third party |
The third party which is chosen for outsourcing the business activities does not have adequate sources to manage the operation of the processes efficiently. |
|
Uncertainty associated with the endemic processes |
The uncertainty is always equipped with the IT operations. The innovation in the digital world and technology thrives with the occurrence of new risks whose proactive mitigation plan is not developed. |
|
Hidden cost associated with the outsourcing processes |
It is difficult to estimate accurate inflow and outflow of the cash when dealing with the outsourcing of activities with the third party. The relocation of the cost set up are associated with the uncertainty in the cost plan which results into the over budgeting of the activities |
|
Loss of Innovative capability of the enterprise |
The outsourcing of the business processes to the third party results into the loss of innovative capability of the Aztec organization because the company is not looking on analysing the flow of business process. The creativity of the enterprise can come to an end. The limitation of performing activities can result into the restrictive environment for the flow of new ideas, vision, thoughts, and experience which helps in changing the business tactics. . |
|
Risks associated with the data protection |
The security breaches are the major concern for the outsourcing of business services to the third party. The privacy of data is harmed due to the inclusion of third party. |
|
Processing |
It is difficult for the organization to adopt capability maturity model for working with the offshore service provider. |
|
Limited use of knowledge |
The knowledge of the employees is not efficiently used by the organization. Their skills, talents, thoughts, vision, ideas, and opinion are not fully utilized. |
|
Failure of vendor in carrying out activities |
The contingency plan of the vendor is not up to the mark for carrying out business activities (Cobb, 2013). The specification of the requirement is not clearly defined to the vendor. |
|
Government regulation compliance |
It is difficult for the organization to negotiate with government compliance. The specification of the requirement is not clearly defined to the vendor for taking government compliance. |
|
Organization culture |
The difference in the organization culture can affect the working of the free flow activities to complete the project within time. The cost is the major challenge which comes in front to align the business activities. |
|
Turnover |
The increase in the value of the turnover can have a direct impact on the client organization to trained their employee according to the requirement of the vendor company to fulfil the task within the mentioned time (Brownill, 2013). |
|
Fluctuation in the productivity |
The fluctuation in the availability of the trained employees can affect the working culture of the outsourcing third [arty. |
|
Changes in working culture |
The pitfalls have been seen in the service providers for aligning the activities according to the mentioned baseline. The changes in the cost of the resources can affect the economic viability of the enterprise. |
|
Benchmarking |
The provision of benchmarking is the challenging tasks for the working employees to complete the activities within the specified time and budget |
|
Service level agreement |
The vendor is incapable of delivering the products at right time as mentioned in the service level agreement. |
|
Disputes between the company and the employees |
The outsourcing commercial contract can result in the occurrence of conflict and chaos due to the cultural boundaries of the working employees. |
|
Transition time |
The increase in the unexpected cost of the project which results into the increase in the project budget due to the incomplete activities within the transition time. |
|
Threats to personal information |
The inclusion of the third party can open the doors for the hacker to hack the confidential personal information of the employees from the database of the company. |
The outsourcing program for the Aztec organization creates the picture of improvement in the business tactics program. The revenue of the organization can be improved to the 60%. The mapping of the processes can be done with the use of standard policies and procedures. The core competencies of the organization can be leverage down. The business continuity can be managed with the use of continuous improvement model. The technological environment helps in bringing flexibility to the business applications. The continuous training and development program helps in improving the skills and talent of the working employees. The value can be added to the completion of the business activities with the utilization of the outsourcing model. It has been seen that business process of the company are outsourced because of the ineffective availability of the expert staff for increasing the efficiency of the business processes (Jansen, 2013). The feasibility of the processes helps in analysing the quality of the product delivered by the outsourced company after completing the business activity. The capability of the processes and operation can be improved with the effective utilization of employees knowledge for completing the business activities. The translation of the business activities helps in developing the robust environment to motivate the dependencies of the working team for completing the project with the accumulation of third party. The strategic decision making helps in changing the traditional business environment with the outsourcing environment. The upgrading of the business activities should be periodically done to reduce the potential risks associated with the traditional working program of the company. The traditional working can be effectively changed with the newer concept of outsourcing activities with the third party. The risks associated with the traditional business processes can be divided with the division of activity program with the outsourced company. The information should be gathered from different sources for outsourcing the business activities. The communication between the stakeholders should be effectively managed to formulate the requirement of establishing outsourcing program within the working curriculum of the Aztec enterprise (Alner, 2015). The quality assurance and management program should be undertaken by the Aztec enterprise to determine the quality of the product delivered by the outsourced company as the result of completing the project. The testing of the product should be checked on the basis of customer specification requirement plan (Ferrer, 2013).
The outsourcing of the business processes is comprised of many risks which are broadly divided into three categories which are classified as strategic risks, operational risks, and composite risks. The operational risks are usually associated with the quality and cost management program which is undertaken for completing the business processes. The strategic risks mainly deal with the mitigation plan associated with the security of intellectual property. The composite risks are associated with the limited use of knowledge and expertise of the employees to their full extent. The mitigation plan should be undertaken to resolve the risks associated with it for getting effective working of the processes for completing the project (Brown, 2008). The following diagram shows the mitigation plan which should be undertaken by the Aztec organization to overcome the scenario of risks associated with the outsourcing activities.
The training and development program should be arranged for resolving the risks associated with th human resource. The upgrading of the network and the system periodically helps in overcoming the problem of technological risks. The qualitative risks associated with the outsourcing business process can be solved by deploying a qualitative survey to know the actual requirement of the customers to enhance their satisfaction level. The process risks can be resolved by measuring the profitability ratio of the enterprise.
It is recommended that the outsourcing of the business process to the third party for the management of data application is beneficial for the Aztec enterprise. The outsourcing helps in increasing the turnover of the enterprise from 30% to 45% with the involvement of third party to resolve the business issues and risks associated with the completion of activities. The focus should be given on developing the IT infrastructure which is useful for seeing the business operation performed by the third party. The outsourcing program for the Aztec organization creates the picture of improvement in the business tactics program. The revenue of the organization can be improved to the 60%. The mapping of the processes can be done with the use of standard policies and procedures. The responsibilities of the outsourced company can be determined with the development of risks analysis and mitigation program to resolve the issues of the enterprise. The sharing of the risks of the Aztec organization with the outsourced company helps in reducing the cost spent on managing the resources of the enterprise. The operational cost can be effectively used for managing the business activities on the outsourcing platform (Balogun, 2015). The knowledge of the expertise can be assembled on the single platform for solving the business problem. The efficiency of the worker should be improved with the association of training and development program. The cost spent on running the application and business processes can be controlled with the use of outsourcing program. The association of the third party helps in prioritizing the activities for controlling the outsourcing of the business operations. The quality assurance and management program should be undertaken by the Aztec enterprise to determine the quality of the product delivered by the outsourced company as the result of completing the project. The risks management program helps in managing the continuity of the business plan by reducing the risks associated with the business activities.
Conclusion:
The outsourcing program for the Aztec organization creates the picture of improvement in the business tactics program. The revenue of the organization can be improved to the 60%. The key step is to identify the requirement or need for outsourcing the business processes and then signs the agreement with the outsourcing third part to carry over the business processes. The upgrading of the system helps in establishing new security architecture for the Aztec organization to outsource their business data and processes by maintaining the confidentiality, accuracy, and integrity of data in the transmission process
References:
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