Contracts: A Vital Part in Outsourcing

Filed in archive Outsourcing Issues on August 1, 2006

Research analyst Gartner recently revealed that contracts in outsourcing plays a vital role in the outsourcing deal's success or failure.

According to the research analyst, the inability of coming up with a stricter and more rigid outsourcing contract often leads to the failure of any outsourcing deal.

There are 18 key areas found in every standard outsourcing contract. Gartner pointed out that 15 out of the 18 key areas in outsourcing contracts should be redefined or be taken into careful consideration. Some of these areas identified includes security and confidentiality, legal compliance, fees and payment terms, and auditing.

Helen Huntley, a Gartner analyst pointed out that the rules applied in onshoring contracts does not necessarily work for outsourcing ones. For example the IPR of the outsourced country should be considered so that the firm could still protect their identity even when outsourcing or Offshoring.