Contract specialist’s advice on protection for Software Outsourcing dealsSaturday, April 08, 2006
Contract specialist’s advice on protection for Software Outsourcing deals indicates that how much the technology service providers are struggling to keep pace in a lethargic economy world. Some savvy Information Technology executives are adding new defensive clauses into licensing and Offshore Outsourcing contracts to ensure smooth operation process should an important technology or service vendor go belly-up. In Software Outsourcing lots of frauds are also taking place as the use of the business process is increasing. Companies are now demanding for protections, like lifting restrictions on appointing their staff and placing the software code into an escrow report. Companies are under the constant threat of fraud or cheating in such Offshore Outsourcing services. Day by day many IT companies are failing in the market; this has very bad impact on the overall market of the overseas dealings.
Companies are demanding for protections against such frauds that are taking place in the market. They didn’t have those specifications in their agreements before, because these companies appeared like they were stable in the market and nothing would harm their business. They looked very promising too in the initial stages. But it looks like that there is a big payoff between acquiring unique services or products from a service providers and the risk of dealing with a start-up with them. These are not only start-ups and facing the consequences of hard economic times prevailing in the market. The no. of experts suggests that they see and concerned about the viability of large companies as well for such overseas services. Now you can not trust even big names also as you don’t know when they fail in the competitive and volatile market.
Software Outsourcing companies
Many Software Outsourcing companies have recently failed in the market of were unable to cope up with the competition of the market, according to the news. Many Offshore Software Development company’s financial performances are also going down up to large extent. Companies are now trying to lessen the business risk by keeping options with their own supplier base and trying to avoid the possible risk of Software Outsourcing. Another reason for the company’s failure is the economic downturn, and it is also the reason for the companies to go for the overseas dealing.
Software Outsourcing no doubt has many advantages and the process is useful in many ways but the failure of the companies in the market creates the threats in the mind of the clients. There should be stipulations into agreements to buy back tools from the Offshore Outsourcing service providers as a backup plan. Even careful watching can’t always guarantee that a user organization will detect the threatening shutdown of one of its service providers. In such Software Outsourcing deal, ongoing agreement administration is perhaps the weakest part of agreement, commented by the experts.
All these indicate that there should some provisions for the companies who are actively involved in the process of Offshore Software Development. Such provision and legal aspects would help in reducing the threat of the process of Software Outsourcing in many ways.