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Contract
flaws increase offshore outsourcing risk
Businesses are
increasing the risk of offshore outsourcing disaster by failing to draw up
tighter contracts when dealing with overseas service providers, according
to analyst Gartner.
Out of the 18
key areas in a standard outsourcing contract - or master services
agreement - Gartner has identified 15 that need significant review and
modification when going offshore.
The most
critical areas that need specially adapting for offshore outsourcing
contracts include proprietary rights, security and confidentiality, legal
compliance, fees and payment terms, and
auditing.
Intellectual
property (IP), in particular, is a major issue because different countries
and cultures have different attitudes towards IP protection - IP rights
enforcement is, for example, weak in China and Russia but strong in Ireland. The Gartner report warns. 'Find out what IP rights
enforcement is like in the provider's country. In some areas, data and IP rights
are lax and little is done by the foreign government to monitor and
control IP.'
Before signing
an offshore outsourcing, deal organisations must determine what legal
system and which country, will govern and have jurisdiction over any
contract disputes. Gartner
advises that companies insist the contract is governed
by the laws of their own country and not those of the overseas service
provider. Gartner
said. 'Be aware, though, that
some courts in foreign countries will claim jurisdiction, regardless of
what the contract says.'
Security and
auditing are also key considerations in any offshore outsourcing contract
negotiations. Gartner's
advice is to establish the right to audit whatever locations are being used to deliver the offshore services, and to
stipulate who will be performing audits.
Gartner
analyst Helen Huntley said in the report many
organisations that are looking to establish global outsourcing contracts
with offshore service providers mistakenly believe the terms and
conditions are about the same as onshore
contracts.
She said. 'This can lead to contractual risk
for liability, regulatory compliance, legal enforceability, service
performance and privacy breaches, among other things, when outsourcing to
a foreign service provider.
Outsourcing contracts structured with in-country providers will not
work as templates for global outsourcing without significant
modification.' |
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Outsourced Contact Centres
Continue to Promise Business Benefits ...
New analysis from Frost
& Sullivan North American Outsourced Contact Centre Services Market
reveals that this market earned revenues of $19.5 billion in 2005 and is
likely to reach $20.1 billion in 2012. Cost savings and better overall
customer experience are the main factors propelling the market. The outsourcing of customer care activities is expected to enable the US companies reduce their
capital expenditure and re-invest their savings in other business
segments.
Offshoring
undermines job security but not motivation
According to a study by
Watson
Wyatt, the negative impact of
offshoring on motivation and stress levels of employees is quite less in
the UK. About 37 percent of the
respondents were working with the companies engaged in offshoring work,
while 52 percent were working for firms not engaged in offshoring. About 36 percent of the employees
working with the companies engaged in offshoring work reported that they
were considering a job change over the next one year. About 36 percent of the
respondents working with companies offshoring work felt less secure in
their jobs due to offshoring, as compared to 11 percent figure for the
people from the other group.
About 17 percent of the people in the first group expected that
there is a large chance of their jobs getting offshored over the next 12
months as compared to the 2 percent figure for the other
group.
AMD
To Double Head Count Of Chip Design Team In
India
Mr Ajay M. Marathe, President, Advanced Micro
Devices India announced that the company would double its chip design team
in Bangalore,
India over
the next one year. A 100
hardware engineers are currently working on latest chip designs, besides
software and alliances management.
Nokia’s network
services base to be moved to India
Nokia has
announced that India would be leading its
global managed services. The
new arrangement would be effective from July 2006. The move was
attributed to the company's commitment to tap the global services
market along with the presence of the innovative mindset and favourable
environment for outsourcing in India. In a parallel development, the
company announced that its Chennai, India-based global networks solutions
centre has started its operations.
Alberta
to upgrade e-health through $10M IBM deal
The Government of Alberta
Wednesday said it will upgrade its e-health records system across the
province through a $10-million contract with IBM. ...
Ukraine's
AO Ukrinbank signs TietoEnator to upgrade payment cards
...
TietoEnator, one of the
major European suppliers of IT solutions, and AO Ukrinbank have entered into an
agreement for upgrading the bank's system for payment cards.
Ennis State
Bank Outsources Web Banking Support to
FundsXpress
Ennis State Bank, located
in a suburb of Dallas, has contracted with
FundsXpress for online banking support 24 hours a day, seven days a
week. The partnership is
recognition of the fact that a large percentage of online banking is conducted after normal business hours, and 24-hour
support enables online customers to receive instant feedback to their
requests anywhere, anytime... |
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CSC to
invest $40Mn for new facility at Noida
CSC has announced its plans to launch a new
campus in the north Indian city of Noida. The first
phase of the new campus is expected to be
operational by March 2007 and will have a capacity of 3,000 people. The company plans to increase the
headcount for the new centre to 4,500 in subsequent phases. Availability of a good talent base and presence of a
favourable business environment, along with good infrastructure were
stated as the key reasons behind the move. At
present, the company has a headcount of about 5,400 employees in
India operating from
locations such as Noida, Chennai, Indore,
and Hyderabad.
EMC
Corp to invest US$500m in China by 2010
As
part of the new investment plan, EMC will launch an R&D centre in Shanghai next month, the first of its kind in
China.
The new centre will recruit about 100 R&D engineers and plans
to expand the workforce to 500 by 2008. Globally, EMC already has more than 20 R&D
facilities, with four in India.
Oracle
set to open China support centre
Oracle is
opening a support centre in China. The Dalian Global Support Centre
will not only service China, Korea and Taiwan but
also future expansions in Asian Pacific, the company
said.
EDS
to double its Chinese outsourcing facilities
EDS is the latest IT services provider to plan
for expansion in China. Reports last week said it aims to
double its headcount in the country to 2,000 staff by the end of next
year.
IBM WILL
INVEST $40 MLN IN RUSSIAN DEVELOPMENT LAB OVER NEXT 3
YRS
IBM has announced the launch of its
development laboratory in Russia. IBM will invest about USD 40 million over the
next three years for the laboratory.
The new facility is expected to employ
about 200 professionals by the end of 2008. The laboratory will focus on
development of mainframe technology and is a part of the company's plan to
raise its investment in high-growth countries, including
Russia,
Brazil,
China, and India.
In a separate development, the company also announced the launch of
a new delivery centre at the Gold coast of Australia.
CIBER
expands in India
CIBER, Inc. today
announced the grand opening of another software application development
and management centre in India. The site joins two other sites in
Bangalore,
India,
which CIBER acquired as part of its 2005 acquisition of Bangalore-based
Knowledge Systems Pvt. Ltd.
Perot
Systems opening a fourth centre in India
Perot Systems Corporation
is setting up a fourth facility in India, in Coimbatore.
Announcing its expansion plans at a news conference in Chennai,
Peter
Altabef, president and
CEO, Perot Systems, said the
opening of the new information technology centre is
planned for late summer.
Accenture
buys Fintech consultancy Random Walk
Accenture
said the acquisition expands its custom software integration and
development capabilities for financial institutions that trade in stocks,
bonds and .....
TCS
signs $30mn deals with Chilean firms
TCS has won
two contracts with a collective value of about USD 30 million in
Latin America. The two
contracts have been awarded by Transantiago, the public transport system
in the Chilean capital of Santiago, and a Spanish banking
group. TCS will manage
the BPO and IT operations for Transantiago for a period of three
years. The company will build and manage
communications, customer care, operational support, and information
systems for Transantiago by leading a conglomerate of four other service
providers. The company will
manage the back-office processes and develop a documents management system
for the Spanish bank's loan and credit business in Chile over
a period of five years.
Unisys
Unit Gets 5-Year Unibanco Deal
Unisys has
won a five-year, USD 47 million IT outsourcing (ITO) contract with
Unibanco. Unisys will provide
support and maintenance services for the bank's automated teller machines,
check dispensers, and automation equipment, including PCs, laptops,
servers, network devices, and printers. It will
also provide the helpdesk services from its Sao Paulo, Brazil-based
managed service centre. In a
separate development, the company won a five-year, USD 11.6 million ITO
contract with REAAL Insurance.
Ness
Technologies Wins $16 Million Outsourcing Contract With Assuta Medical
Centres
Ness has won a eight-year,
USD 16 million IT outsourcing (ITO) contract with Assuta Medical
Centres. Ness will replace Assuta's core IT systems with new
generation systems. As part
of the contact, Assuta's IT department employees would
be transferred to Ness. The contract is
aimed at improving Assuta's medical services system by providing
better customer services and additional tools for medical and
administrative personnel.
Atos
Origin to revamp IT system of French water
agency
Atos Origin has announced
the renewal of its managed operations contract with Agence de l'Eau Seine
Normandie (AESN) for a period of five years. In a parallel development, AESN
has engaged Atos Origin for revamping its information systems, including
infrastructure, applications, and databases. Under the managed operations
contract, Atos will provide various services, including maintenance,
operations, and support for desktops and networks to AESN. Under the IT systems revamp
contract, the company will migrate AESN's IT
system towards open source solutions. As part of the revamp process, it
will migrate AESN's mainframe infrastructure to
Web technologies, rewrite the applications portfolio, introduce geographic
data and decision-support software, and create an
extranet.
PaperFree
Medical Solutions, Inc. (PFMS.OB) Secures a Billing
...
KMS Computer Services
Inc., a wholly-owned subsidiary of PaperFree Medical Solutions Inc.
(OTCBB:PFMS), has been contracted by St. Vincent Madison County Health
System, Inc. to provide billing services management oversight and staff
augmentation to St. John's Health System in Anderson,
IN. |
