In my last column, I discussed the convergence between the SaaS contracting model and the outsourcing contracting model. In this column, I wish to explore a strongly related topic: the increasing trend of using cloud elements in outsourcings.

There is some overlap between software-as-a-service (SaaS) services and cloud services. Before the cloud became the marketing buzzword we know and love today, a SaaS service referred to a contracting model where software features were provided over the Internet. From a legal perspective, there was not much of a difference between SaaS and the application service provider (ASP) model that preceded . . . [more]

For nearly 20 years, organizations that outsourced part of their functions to service providers have relied on SAS 70 reports to gain assurance that proper controls relevant to user entities internal control over financial reporting are in place at service organizations. With the globalization of outsourcing services and changes in regulatory landscape, the American Institute of Certified Public Accountants Auditing Standards Board issued Statement on Standards for Attestation Engagements (SSAE) No. 16 in January 2010. SSAE No. 16 is effective for reporting periods ending on or after June 15, 2011 which means that the new standards could affect organizations as . . . [more]

As service provider’s counsel, I watched it happen many times. After the Service Provider worked diligently to prepare a response to a Customer RFP and was down-selected based on the Service Provider’s proposed solution, the scope of services was reduced. The reasons varied. Sometimes they were financial: the Customer was not able to afford particular aspects of the solution or the benefits arising from parts of the solution no longer justified the expense. In other cases the reasons were operational or delivery-based: the Customer lacked the necessary infrastructure to implement components of the solution or it would have taken the . . . [more]

It was quite a surprise to read that Howrey LLP, a large US based law firm, recently closed its doors. From various accounts, there were a host of reasons the firm went out of business. The irony is that Howrey was a pioneering firm with a desire to innovate. 

There are some interesting lessons learned. Howrey began to offer a suite of discovery services similar to those provided by LPO [legal process outsourcing] vendors. Innovative, yes! But perhaps not that smart. It seems that the global legal landscape was innovating faster (than the firm). 

Bob Ruyak, the firms Chairman and . . . [more]

In almost all business process outsourcing transactions it is virtually impossible for one service provider to perform all of the services required. So subcontractors become fundamental to the delivery of the services. Here’s our list of some key issues to manage when dealing with subcontractors. 

1. One Throat to Choke.
Or perhaps more politely, one hand to shake. Remember that whether your deal involves one subcontractor or a consortium of them, the customer will insist on the prime contractor remaining liable for performing all of the obligations under the outsourcing contract, regardless of whether some of the obligations have been . . . [more]

Services outsourcings and software-as-a-service (SaaS) offerings lie on nearly opposite ends of a spectrum of managed services that a service provider can provide a customer. Traditionally, they serve the customer in quite different ways and are considered to be separate services, but some service providers are offering “customized” SaaS services, which in essence lie in the middle of this spectrum of managed services. Only certain services can be offered both as a SaaS Service and through an outsourcing, but the breadth and complexity of SaaS Services, particular cloud-based SaaS Services, grows constantly.

Outsourcings are generally used to transfer responsibility for . . . [more]

My previous posting examined three issues relating to confidentiality obligations in an outsourcing agreement where care and attention may be needed to ensure that the parties achieve the results they are intending. I want to continue along the same path in today’s posting, looking at four more issues relating to confidentiality obligations in outsourcing agreements that the customer or the service provider do not always get right. 

4. Restrictions on the disclosure and use of Confidential Information

Confidentiality obligations frequently limit the ability of a party to use or disclose the confidential information of the other party in terms similar . . . [more]

Multi-country outsourcing means customer engages supplier to deliver outsourcing services to its affiliated entities in various jurisdictions. Structuring and negotiating a long-lasting outsourcing relationship require the parties to effectively manage many risks. Multi-country outsourcing deals multiple the challenges.

There are different ways to structure a multi-country outsourcing relationship. The most commonly used approach is to have a framework agreement between the two principal entities and local agreement between local entities of the two organizations. The terms and conditions in the framework agreement will flow to the local entities except to the extent they have been modified in the local agreement. . . . [more]

Fronterion, a consulting firm for outsourced legal services, recently revealed the Top 10 legal process outsourcing (LPO) trends for 2011 and released its second annual report outlining the prospects for the LPO industry in the coming year. 

The Top 10 LPO Trends for 2011 are: 

1) A Fundamentally Changing Legal Profession. Continued downward pressure on costs and the globalisation of legal services provide a perfect environment for LPO. Those who refuse to engage with LPO will increasingly become a minority – the industry can no longer be ignored.

2) Enterprise Approach. Many firms already outsource legal work at . . . [more]

Now that 2010 has come to a close and the ink is dry on the flurry of year end deals, many of us can now sit back . . . draw in a long, deep breath . . . relax . . . and start to focus our vision on the opportunities that lie ahead for 2011. What would the start of a new year be without some predictions on the future of business process outsourcings (BPO). Here’s some of our projections for 2011: 

Importance of Cost Reduction – Cutting Measures 

The debates continues as to whether or not we . . . [more]

The typical outsourcing involves the outsourcing of not only a business function, but also the technological infrastructure to support it. When preparing an outsourcing agreement, the hardware, software and systems of each party to the outsourcing need to be carefully considered and well understood. It should be part of the due diligence of embarking on the outsourcing process.

Most companies that are looking to outsource will already have in-house technical expertise. This in-house expertise should be relied upon to map out a company’s technical capabilities and limitations. This will set the stage for properly mapping the technical requirements for the . . . [more]

My kids watch a popular TV show called Mythbusters in which the hosts seek to uncover the truth behind popular myths. While watching it with them the other night, it struck me that outsourcing has its own share of myths. One that I think deserves having a light shined on it is benchmarking. In this article, I’ll discuss the myth around benchmarking, its impact on an outsourcing agreement, what I take to be benchmarking’s proper role, and I’ll endeavor to do it all with the same “gleeful curiosity and plain old-fashioned ingenuity” that the hosts of Mythbusters are described by . . . [more]