Reassessing your outsourcing contract

Outsourcing some tasks within your title agency is an effective method of controlling costs and staying focused on your core competencies.

When making the decision to outsource, one of the first things you will do is come to an agreement on the parameters of the work, which should be spelled out in detail in a contract.

And while you may be perfectly happy with the services you are receiving from your provider, it’s helpful to review the contract each year to ensure that you are maximizing all services promised and to evaluate if something has changed in your processes that requires a rewriting of any of the elements of the contract.

Here are a few things to take a look at in your annual review.

Services review

When reviewing services provided by your outsource partner, make sure you include the department managers who are most dependent on the provider in the review process. Needs and processes change over time and the point person will have the greatest input on any changes that need to be made.

Review the following:

· Are all services mentioned in the contract being provided as defined?

· Is the provider meeting the time frame for delivery as promised?

· Are you receiving the level of support, training and customer service indicated?

And finally consider if there is language in the contract for adding new services or reducing the level of service and how either would impact pricing.

Cost review

It is of course typical for costs to go up when working with an outsourcing company, so you will want to review any changes to the fees. If there is an increase, ensure that you are still within the financial parameters you took into consideration when contracting with the third-party provider.

As a matter of form, also review the legal language around terms of payment and late fees to ensure it has remained the same as previously agreed upon.

Security and compliance features

Given how strictly regulated the title insurance industry is, you will want to make sure that your vendor meets the strict requirements of your regulator and the ALTA best practices protocols.

It is especially critical that your provider includes security protocols in the contract so that you understand what precautions are being taken to protect your data.

Know your provider

Always take a peek behind the curtain to ensure you know exactly who you are dealing with and that it is spelled out in the contract. Establish whether your third-party provider is using in-house labor or further subcontracting out some of the work, which would require additional investigation to ensure all legal and security parameters are being met.

Also verify that the basics are spelled out:

· Ensure the organization is properly licensed

· Review indemnity clauses

· Confirm disaster recovery and business resumption plans

· Revisit termination requirements

And finally, track the original contract against the renewal to ensure you haven’t missed any miscellaneous changes or elimination of clauses and document everything for future reference.

At Positively Balanced, we believe successful businesses are built and maintained by keeping your primary focus on activities that generate revenue. We help you handle everything from full-service escrow reconciliation, audit preparation, consulting, to bookkeeping, allowing you the time to focus on your business. Contact us today to learn more!