February 23rd, 2017
Time. Let’s be honest – there’s never enough when you’re a mortgage and finance broker. And while we can work many wonders here at Connective, unfortunately we don’t have a magic wand that creates more hours in a day. However, we do have some ideas on how you can reduce some of that noise in your business and outsource time-consuming tasks so you can focus on the important things, like growing and developing your business.
So what’s involved in outsourcing if you’re a mortgage and finance broker? Outsourcing, or the contracting out of a business activity, is a big step that needs to be approached correctly if you want it to have the desired effect of saving you time and hassle. In this article, we address the key risks associated with outsourcing and look at how you can protect yourself through implementing a risk management framework for outsourcing, together with creating an outsourcing agreement.
What are the risks with outsourcing?
Mortgage and finance brokers are practiced at managing risk through a strict adherence to compliance procedures and all of their business activities are covered by their Professional Indemnity Insurance. So it often comes as a surprise that outsourcing does not transfer all of the risks associated with that activity to the service provider. It very much remains your responsibility. So, before you outsource, it’s important that you consider all risks associated with the business activity as if it was to continue to be performed by your business.
How to establish a risk management framework for outsourcing.
All business opportunities have risks associated with them. But not every risk has an adverse consequence. Some risks are actually opportunity risks that should be explored. What’s important is that you recognise the key risks and ensure that you have thought about what controls you can put in place to mitigate any adverse consequences from eventuating.
We recommend that the following key areas be considered to help you establish a risk management framework if you are considering outsourcing and contracting services:
Creating your outsourcing agreement.
Outsourcing or service arrangements should be undertaken using a written document which contains all necessary terms and conditions of the agreement. (For the purposes of this article, we’re calling it an “outsourcing agreement”, but your service provider may refer to it as a Service Contract or by some other name.) As with any contract or agreement you may use with an external supplier or business, it’s important that you detail exactly what’s required and putting it in writing will ensure you are always on the same page and help to avoid any disputes.
At a minimum, the agreement should address the following:
Monitoring the relationship.
When outsourcing has commenced, don’t forget to continue to bring the love! It’s important to devote sufficient resources to managing and monitoring your outsourcing and service relationships. Our 3 key tips for maintaining a healthy ongoing relationship include:
Don’t forget – if you are a Connective member, your Connective Compliance Team is here to support you with any queries or concerns whenever you need assistance. We’re available on Helpdesk and Live Chat every week day. If you’re not yet a Connective member, why not talk with us about the great support and service we provide to help you meet your compliance obligations and take your business to the next level? To get in touch, visit www.connective.com.au or call us on 1300 65 66 37.