Buying Promises: 31 Risks in Offshore IT Outsourcing Contracts
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Negotiating with an onshore or offshore IT service provider is equivalent to buying promises, regardless of how much due diligence you undertake.
You'll have to trust your selected partner to provide the high-quality services they've promised to some extent.
Your lawyers may surely disagree, but offshore contracts are only as good as the company you're working with.
This indication (integrity) is not presently included in Dun & Bradstreet's company profiles or credit reports.
"Henry, we are highly motivated for this opportunity," one of my partners told me often in Brazil, but I didn't really get the meaning of that statement until we were in the trenches together.
The following are some of the obligations you are adopting or questions you may have when you sign an offshore IT staff augmentation or support contract:
1. Will I receive the number of hours I paid for?
2. Do you guarantee the protection of my intellectual property and personal information?
3. Will I be matched with qualified professionals?
4. Will my billing rates rise when my new crew is trained?
5. Can I get in touch with this vendor if I want immediate assistance?
6. Is this provider ready to work with me if things get difficult?
7. Is this a nation that is politically, socially, and economically stable?
8. Is currency exchange a consideration?
9. Is this a safe country to conduct business in?
10. Is this seller's location in a secure area of town?
11. What is the expense of business travel to this location?
12. How much does it cost for offshore experts from that nation to go to the United States?
13. Is it possible for professionals at this location to get a US passport and visa in order to go to the US?
14. Are contracts formed in the United States enforceable in the United Kingdom?
15. How long does it take for team members going to my location for training and onsite orientation to get a visa and passport?
16. How much will your offshore team's visas and passports cost?
17. Will the offshore team be staffed by someone with full-time experience managing offshore projects?
18. Is this a dependable company with a good credit rating and skilled management?
19. Is this vendor's company equipped with the interpersonal skills required to work with my company?
20. Is there senior management at this offshore provider that speaks English, is responsive, and understands the urgency of your situation?
21. Will the vendor's team management and executive management be available in your working time zone on short notice if you require them?
22. Can this provider scale up to meet your company's demands?
23. Do they have commercial liability and errors & omissions insurance?
24. Do they have access to commercial liability insurance in their country?
25. Do they work with you throughout the day?
26. Is the network infrastructure of this company secure?
27. Is its network infrastructure adequately built and protected by a firewall against intrusion?
28. Is their company location physically secure?
29. Do severe weather conditions affect travel, security, or work schedules in this country?
30. Does this location pose a risk of natural catastrophes to your company?
31. Is this merchant willing to work with you as your requirements change?
You never want to be forced to consider international litigation or arbitration for contract concerns, no matter how much care and money you put into writing a watertight contract with an offshore outsourcing provider.
Unless your criteria are precisely defined and constant, which I have never seen, the contract's requirements should be wide in scope. Otherwise, they will need to be revised and modified before the ink dries.
In any offshore project, establishing good ties is essential for successful communication.
Vision TRE has been cultivating relationships with its offshore partner locations in Brazil and Panama for years.
Over the years, we've built strong trade links across South and Central America.
Because they are founded on honesty, trust, mutual cultural respect, and a shared sense of urgency, these ties are critical to every company that hires us to establish an offshore workforce.