There are a number of risks associated with hosted services that you need to keep in mind.
- Risk is seen as one of the biggest issues with hosted services. You need to be aware of any security issues relating to sensitive data and privacy. As you no longer have independence over your systems and data when outsourcing to a hosting partner, choosing a trusted provider to take care of your IT is vital.
- You may loose the flexibility to react quickly to changes in business conditions. For example if you need to improve service levels or if you require more resources. It is imperative that you continually communicate your requirements to your supplier throughout the life cycle of any hosting agreement. For example, you should let the hosting company know of any changes in strategy or conditions that might impact their ability to deliver the service you require.
- There is a potential threat to the security and access of confidential information. There are many examples where confidential data has gone ‘astray’ or been sold. You must ensure that processes and procedures are in place to ensure that only certain personnel can access specific information, specifically with regards to with payroll systems, human resources and client records.
- Failure to meet your agreed service levels. This can be caused by changing needs, unclear objectives or through incompetence.