Due Diligence in the post-Satyam World

Filed in archive Best Practice on January 19, 2009

Photo courtesy of iStockphoto, Image# 7835377

In a recent article published in InformationWeek, Bob Evans offers 10 tips on outsourcing.

None of these are new - in fact, they represent perennial advice that is given by lawyers and consultants to those companies seeking to outsource. What has changed is the baseline of credibility in the outsourcing industry.

As such, and as one would expect, a higher level of due diligence is being stressed. However, financial risk management should not automatically push outsourcing customers to larger vendors... remember, Satyam was one of the largest.

Instead, it is important to recognize the risks involved in outsourcing a particular process, the economic and innovation benefits of conducting the outsourcing, and the ability of the customer to mitigate risks that are beyond the appropriate risk tolerance level for the particular process.

Again, this is not new advice, but in this post-Satyam crisis world, it rings even more true.