The Dilemma of an
Outsourced Service Provider
Outsourced service providers have mushroomed all throughout
the world to serve client companies mostly from the UK and the US who are
likely to prefer outsourcing to Philippines for many and varied reasons. Outsourcing
Philippines
however is not spared from several issues confronting it.
Outsourced service providers are also known as managed
service providers who tackles services fro another company. Tasks and services
rendered here include IT services, remote data backups, desktop and security
monitoring, and technical assistance and are provided via the internet. Outsource
service providers also manage client company's web hosting and maintenance of
their websites.
Most companies choose
an outsource service provider that can best cater to the needs of the company.
Client companies have the option to select manage services provider. And as a
business itself, these service providers need to answer several issues and
considerations. This is to ensure that as an outsourced service provider, they
are able to thrive sufficiently and keep themselves secure of a good and bright
future.
Below are the issues and considerations outsourced service
provider must take into account:
Issue:
Outsource agreements that are flexible to change its
technology platform over time.
Consideration:
Ensure that you're able to change your technology as your
business grows. Otherwise, a customer could require one set of technology even
as you provide separate technology for other customers. This doesn't mean that
you have to disappoint customers' requirements for service levels and
technology refresh over time. But it should allow you to meet these
requirements in flexible fashion.
Issue:
Freedom to use services offshore or use subcontractors as a
cost-savings approach.
Consideration:
To reduce costs, your outsourcing contract should provide
that you may relocate services and work with subcontractors of your choosing.
The customer will require you to negotiate appropriate confidentiality
provisions and may attempt to assert other limitations on these rights. The key
to securing this right is to guarantee clients seamless, high-quality service.
Issue:
Other measures service provider needs to have to keep costs
under control.
Consideration:
If a "cost-plus" deal isn't an option,
alternatives include per-service fee increases. In this event, the contract
should also let you process change requests through an orderly change-control
procedure. If there are increased costs, you should have the right to come to
agreement with the customer on additional charges. Also consider attempting to
get the customer to agree to shoulder some of the burden of unanticipated cost
spikes caused by the customer not following agreed-upon procedures.
To the extent that the customer's delays require you to sideline valuable
resources, you should consider putting appropriate cost-containment provisions
in the agreement. For example, if a customer delay forces your personnel to
work overtime, the customer should pay for any increased wages. In addition,
the contract can allow for cost-of-living increases if appropriate.
Issue:
Ownership/ proprietorship of the work service provider did or has developed on
customer engagement.
Consideration:
Your outsourcing contract should clarify which party owns work performed rather
than leave this matter open to question or later negotiation. Vagueness could
lead to conflict later on. You and the client should clearly define ownership
of the contracted work, whether it's software, business processes or other
intellectual property developed over the course of the contract.
Issue:
Service provider's protection against piracy of its best employees.
Consideration:
Good talent is always in demand. Your outsourcing contract should reduce the
likelihood that the customer will try to recruit your employees by having an
appropriate nonsolicitation and nonhire clause.
Issue:
Modular outsourcing contract to be provided by the outsource service provider
to its customers.
Consideration:
A master document that references concepts or attachments is suited to the
ever-changing reality of an outsourcing. For example, the term of your contract
should be a stated number of years or a month after any transition period is
completed rather than a specific begin and end date. If your transition effort
runs late, the length of time for service delivery is effectively pushed back
so that a provider won't find his term shrinking. Contrast this with a more
limited, specific date-driven contract that isn't flexible enough to recognize
the manner in which project plans may change.
