OFFSHORE OUTSOURCING
ISSUES - VENDOR RELATED
One of the most critical elements of
Offshore
Outsourcing is vendor
evaluation process and vendor selection. Loss of control
(on quality, time lines, et al) is inherent to
offshore outsourcing.
Besides, there are concerns about compatibility, business culture
and ethics. Initial due diligence is necessary to cement a strong
partnership.
Clarity is necessary between the outsourcer and
the offshore vendor on the following issues:
- Ownership of Information
Both the parties involved must be clear regarding the
ownership of information exchanged as well ownership of the
deliverables. Outsourcer must be fully aware of the IP laws
in effect within the vendor’s country. Taking care of this
issue will help avoid disputes that may arise towards the project’s
completion.
- Security
Offshore vendor has to make sure that the discretion, safety and
privacy of the critical information passed onto them is maintained
during and after the project completion also. Offshore vendor must
strictly adhere to conditions related to data exchange, access,
utilization, storage and allotment laid down by outsourcer.
This issue becomes more crucial during the transition phase.
The security practices adopted by the offshore vendor needs
to be thoroughly known to outsourcer. Sharing of information
should not ultimately lead to loss of confidential business
details for the outsourcer.
- Business Continuity Agreement
Both parties must agree and sign the terms for continuity of
outsourcing contract. While outsourcing, you need to
deal with international laws. So be prepared to tackle, should
any disagreements arise with the offshore vendor. Taking care of
this issue will help outsourcer steer clear of huge monetary losses
if a dispute results in sudden termination of the contract.
A contingency plan should always be in place from the very start,
should any eventuality, which may be beyond offshore vendor’s control,
appear.
- Reporting
Both the parties must mutually agree regarding the level of
communication and reporting required to keep each other updated.
A well-defined standard reporting procedure must be in place
before the actual project execution. Have an experienced, dedicated
project manager, apt at handling both business relations as well as
for continuously monitoring the project’s progress as a moderator.
This moderator will also keep a track of the contract terms being
adhered to. The level of direct involvement of outsourcer’s top
management must be clearly specified.
Traditional Outsourcing models provide businesses
with a common communications platform, and usually include a personal
visit to the outsourcing partner's destination.
The Global
Delivery Model gives you the benefit of resolving the issues onshore.
As required, you can always verify the necessary resources at the onshore
office of the outsourcing partner. The involved parties could document
issues collaboratively. Both parties, in real time,
can easily and flexibly implement necessary alterations in business
processes upon mutual agreement. This might not be possible with a
traditional offshore model, where you do not have any point of contact
onshore.
MachroTech is a global Information Technology (IT)
consultant and services provider successfully following its
Global Software Delivery Model to deliver premium quality products and
services to its clients at affordable cost.
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