With every new disruptive technology comes unknown challenges that arise. With outsourcing and shared services, many organizations experience the risks associated with data security, performance and resilience, the provider’s compliance with laws and regulations, loss of intellectual property, and the ability to terminate service without excessive termination penalties. 

Using any third-party provider will require organizations to transfer information to them or across different systems as a part of their cloud service, and this can cause concern especially if the information is sensitive or confidential. This increases the risk of cyber breaches which outsourcing and shared services providers address through auditing security processes and reinforcing potential weak points. Organizations need to clarify with their provider the security and risk measures they undertake before choosing a provider.

Legal and regulatory compliance is another hurdle for outsourcing and shared services providers, as regulations usually lag behind technology which may affect how organizations consume services. Therefore, ensuring your outsourcing and shared services provider is compliant is essential, and having processes in place to address regulatory changes that may affect your service is important for your operations.