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As businesses seek to focus on their core capabilities, outsourcing agreements can be a cost-effective and beneficial option. JMW Solicitors can help your organisation maximise the value of its outsourcing arrangements with tailored legal expertise and support.
Our commercial law team can advise you on all aspects of the law as it pertains to outsourcing, ensuring your business is able to draft a legal agreement that properly accounts for foreseeable risks, and provides all parties with a clear understanding of their responsibilities.
How JMW Can Help
At JMW, our commercial law solicitors have experience of advising business looking to outsource key functions and processes, ensuring that the resulting outsourcing agreements have robust relationship management processes and clear mechanisms to allow for changes over the course of the agreement.
Since outsourcing arrangements often impact on a section of your workforce, we will help you to draft the agreement to ensure that your business is not exposed to undue risk in this area.
We also help clients to ensure that contract pricing is clear over the duration of the agreement, meaning that savings can be delivered reliably. Additionally, we will make sure that expectations for service levels are set out transparently, laying the foundation for effective service level regimes with real meaning.
What are the benefits of outsourcing agreements?
When businesses choose to outsource a non-core function - such as IT or payroll - to a specialist provider, it allows them to ensure their underlying processes and administration functions are taken care of, freeing them up to focus on core activities like production or product development.
Other potential benefits include:
- Better efficiency - delegating processes to specialist providers often delivers a higher quality of service than the in-house equivalent
- Cost savings - productivity gains translate into additional capital that can be reinvested in other areas of the business
- Greater capabilities - outsourcing can allow your business to take on functions that would not have been accessible through internal resources alone
- Improved agility - outsourcing can help your business to reactively expand its capabilities in new areas with minimal lead-in time without having to hire and train staff, or to downsize an activity without needing to reduce your headcount
What are the potential downsides of outsourcing agreements?
Although the benefits of outsourcing are considerable, it can create certain issues for some companies that must be kept in mind. These include:
- Loss of direct control - this may create delays on certain outcomes, due to the need to liaise with third-party outsourcing providers
- Service delivery issues - your chosen outsourcing partner may prove unable to deliver the quality of service promised
- Potential instability - your business model is now dependent on the continued success and efficiency of the outsourced service provider
- Contractual issues - if the outsourcing agreement is too rigid, it could impair the agility of your business
- Security risks - communicating business-critical information to outsourced service providers increases the potential risk of data leaks and security concerns
In order to avoid these pitfalls, it is necessary to seek expert advice from a solicitor and adopt a legally thorough approach when drafting your outsourcing agreement.
Talk to Us
If you would like to know more about how we can help you with your business outsourcing options, give us a call on 0345 872 6666, or complete our online enquiry form and a member of our team will get back to you at a time of your choosing.