31 Risk in Offshore IT Outsourcing Contracts Or Buying Promises
Below is a MRR and PLR article in category Business -> subcategory Other.
31 Risks in Offshore IT Outsourcing Contracts: Buying Promises
Deciding to contract with an onshore or offshore IT service provider is akin to buying promises, no matter how rigorous your due diligence. You inevitably have to trust your selected partner to deliver the high-quality services they have pledged. While your lawyers might argue otherwise, offshore contracts are only as strong as the integrity of the company you're partnering with. Unfortunately, metrics like integrity aren’t found in Dun & Bradstreet profiles or credit reports. My Brazilian partner would often say, "We are highly motivated for this opportunity." The true value of that statement only became clear when we worked closely together.
Key Considerations and Risks
When signing an offshore IT staff augmentation or support contract, you’re essentially accepting several promises or grappling with potential doubts:
1. Will I genuinely receive the hours I've paid for?
2. Is my intellectual property and information secure?
3. Will I be provided with qualified professionals?
4. Will billing rates increase after training the new team?
5. Can I reach the vendor for immediate support?
6. Will the vendor collaborate when challenges arise?
7. Is the country politically, socially, and economically stable?
8. Are currency exchange rates a concern?
9. Is business travel to this country safe?
10. Is the vendor located in a safe area?
11. What are the business travel costs to this location?
12. What are the travel costs for offshore professionals visiting the U.S.?
13. Can professionals obtain a U.S. passport and visa for visits?
14. Are U.S. contracts legally binding in this country?
15. What is the visa and passport processing time for training trips to my location?
16. What are the costs for visas and passports for the offshore team?
17. Will the offshore team have full-time, experienced project managers?
18. Is the company stable, with good credit and experienced management?
19. Does the vendor possess the interpersonal skills to work with my company?
20. Are executives English-speaking and responsive, sharing a sense of urgency?
21. Will management be available in your time zone on short notice?
22. Can the vendor scale with your company’s needs?
23. Do they have commercial liability and errors and omissions insurance?
24. Can they obtain commercial liability insurance in their country?
25. Will they work within your time zone?
26. Is their network infrastructure secure?
27. Is the infrastructure professionally designed and firewall protected?
28. Is their facility physically secure?
29. Are extreme weather conditions affecting travel, security, or work schedules?
30. Is there a risk of natural disasters impacting your business?
31. Will the vendor remain flexible as your needs evolve?
Building Strong Relationships
Even with a well-crafted contract, you want to avoid the complexities of international litigation or arbitration for disputes. Since needs are rarely static or well-defined, contracts should be flexible. Establishing good relationships is crucial for clear communications. Vision TRE has cultivated relationships with offshore partners in Brazil and Panama over the years. Our relationships in South and Central America have proven dependable, rooted in integrity, trust, mutual cultural respect, and a shared sense of urgency ?" making them invaluable for any company looking to establish an offshore team.
You can find the original non-AI version of this article here: 31 Risk in Offshore IT Outsourcing Contracts Or Buying Promises.
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