Spreading your risk may increase your risk

Unfortunately, businesses do not realise the two major downfalls of using multiple service providers: differing levels of standards and operating frustrations.

The service level and standards offered from one service provider will never be exactly the same as another, with the result that the company could be placing itself at greater risk by using multiple service providers as those with lesser standards could, ultimately, prove problematic for the entire service requirement.

Operational frustrations

There are also a number of operational frustrations that arise from using two or more service providers, in that a business also needs to keep track of which service provider is responsible for a particular project or task.

The optimum solution for any business when identifying which service provider to choose is to conduct a comprehensive survey of all potential partners to ensure they are not only the best in their industry, but also a good fit for the business.

Conducting an effective audit of any new business partner is essential. It is vital to review the senior management, existing client base, health-and-safety measures, as well as what risk-mitigation tools they have in place, particularly if they are dealing with sensitive company assets such as confidential documents and records.

A centrally controlled system

At Metrofile, we have strict procedures in place whereby every employee's tasks relating to risk mitigation, inclusive of health and safety, are managed through a centrally controlled system and employees are required to flag the tasks as complete. Metrofile's internal audit function reviews the status and verifies the completeness of tasks through random audits.

Another key factor to consider is the sustainability of the company, which also needs to be analysed. Does this company have a long and reliable track record or is it a new and upcoming business?

One of the major downfalls for many businesses when choosing a service provider is price. In an attempt to cut costs, businesses will often receive quotes from multiple service providers and simply select the cheapest option. This can be disastrous, as risk mitigation is not a commodity.

When it comes to choosing a service provider, it is similar to choosing which share to buy. You wouldn't invest lots of money in a share you knew nothing about, so why do the same with your business?