And a little more about offshore contracts.
Ensure that the contract you enter into is custom made for your enterprise. You can customize a basic contract made by your lawyer according to your needs and expectations.
Although each individual offshore contract differs with regard to the type of work to be done, its length and the budget, there are certain features that could be included in any contract.
First, of course, there are the fees. In the initial development phase decide whether the price fixed is based on the relevant specifications and proposal or whether it would be hourly payments for x amount of employees. Determine what time will be billed for services and see that you, as the client, will be able at any time to question the hours billed for services. Any reimbursements to be made by the outsourcer would be those originally decided upon in writing.
Also consider the response time. A set time, such as 48 business hours, should be fixed for responses by both, the client and the outsourcing party in the offshore contract. Responses include any development clarifications and status updates from the vendor’s side and feedbacks, clarifications, approvals or disapprovals from the client. An estimated date for the completion of the project must also be set by the provider.
The offshore contract must also have a detailed and accurate description of the services expected from the provider. This would include techniques, tools used, and timely and detailed progress updates.
The outsourcing client must in turn provide and maintain his own production system and make all up to date developed software modules and documentation related to the project available to the provider.
Also included in the offshore contract must be skill requirements, holiday schedules, the ability of the vendor’s employees to speak English, and details of any third party contracts.

Sometimes companies in a hurry to start their outsourcing go ahead without completing the tedious and time consuming task of drawing up a contract first. They very often sketch a memorandum of intent at face value.

Although such a document may help to generally establish what both of the concerned parties are expecting of each other an actual legal contract is what one really needs to have. No matter how much an outsourcer would like to regard the vendor as a partner rather than an employee and no matter how bright the prospects for a future relationship may be an original contract will help to establish the relationship with its parameters more firmly.

Besides this, you might ultimately wind up spending as much time and effort preparing your memorandum as you would have drawing up an actual agreement!

A contract will be more specific on the finer points, will be interpreted more accurately by various executives and will help to strengthen the client-vendor liaison.

It will allow both, the vendor as well as the client to have a clear picture of what the hazards, returns and the benefits may be for them and for each other, which will make the relationship more transparent and more workable.

A balanced and flexible contract will withstand any foreseeable changes that are bound to occur in technology and the marketplace during the tenure of an outsource and will form an excellent foundation upon which to develop a robust and prolonged outsource relationship.
Both parties must also be prepared for the eventuality of disengagement. An informal memorandum will in all possibility not include the terms for disengaging whereas a legal contract will, thus saving each party a lot of time in court and a lot of money should such a situation arise.

One of the objections people often take to outsourcing of any type, but in particular to legal outsourcing, is the risk of breach of confidentiality.
Although ethic boards have upheld that outsourcing/offshoring legal work to an unlicensed attorney is ok as long as it is under the supervision of a licensed attorney, some still question whether it is.
The truth of the matter is that even without offshoring such work to India and other places, American law firms already assign some of their legal work to not only non-licensed attorneys but to some who are not even law graduates in the United States itself. And it’s not as though their services come cheap. Their work is, of course, overseen by licensed attorneys.
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We have looked into the process of vendor selection. Every year millions of dollars and hours of mulling are spent on this and there may still be no guarantee that it may work. There are now several software in place to help make your vendor selection easier and perhaps more accurate. The trouble is there are now so many of these vendor selection products that it is almost as time consuming and challenging deciding on one as it may be in selecting the vendor itself.
However there are several criteria that would help to make the selection of such software easier.
According to Vyom Bhuta at ganthead.com the six evaluation criteria, in alphabetical order, would be cost, flexibility, functionality, implementability, stability and usability.
These criteria, however, should supplement and not supersede the criteria recognized by your particular company.
A free utility that can assist you in your selection of an outsourcing vendor has been released by Outsourcing Mentor.
You will first be required to answer a questionnaire which will help you identify and prioritize your requirements. Then a graph illustrating the importance of the quality, risk, strategy and cost for you will be made for you.
Once you have studied the graph you will find it simpler to narrow down your list of prospective vendors and to make a selection from them.

Having made a decision to outsource some of your work and now aware of the possibility of a project failing without adequate preparation, one will appreciate the fact that vendor selection is of crucial importance.
So, what should you look out for in a vendor?
• Find out how long the company has been operating and how it has fared so far.
• Look into the past history of the company and learn about the kinds of projects they did in the past, the problems they faced and how they dealt with them, and how much time it took to complete them. Whether the project was completed within the calculated budget is also important in vendor selection.
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We have looked into cross culture differences as a reason for an offshore outsourcing project failing. There are some other common causes, however, besides that and we shall look into these.

All too often the goals and scope of the project are not made very clear to the service provider. The offshore vendor is given the impression that cost reduction is the ultimate goal.
And indeed, cost reduction may sometimes be the only motivation for outsourcing work. This defeats the purpose in itself as the service provider may not be able to achieve this given the rising salaries of IT and BPO employees. Rather than making cost reduction the primary motivation identify and focus on the value you hope to get from the project. If you decide to outsource to the lowest bidder you may be in for a lot of disappointment and a lot more cost in rectifying situations gone wrong.
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In spite of the ever growing number of projects outsourced there still are some that are not so successful. As one of those who may have had an unpleasant experience you may be trying to fathom what really happened. As a prospective outsourcer you may look into the causes too, so that you can avoid the pitfalls.
First of all we need to remind ourselves that there really are some very marked cross-cultural differences and it is because of this that a particular outsourcing project may be misunderstood or misinterpreted. This is one of the major problems faced when outsourcing, because the service provider is unable to fathom the work philosophy of the outsourcing firm as a result of which they cannot work well together.
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