Both, natural and man made calamities could cause concerns for outsourcing companies. But whereas such companies can make plans and take precautions in case of a natural calamity (which could now be predicted fairly accurately) it isn’t so easy with a man made one.
Assassinations, coups and the like can cause a lot of turmoil and chaos in a country and no matter how well prepared for it one may imagine oneself to be there is always the unexpected to be expected. Not only can such disasters be detrimental to the interests of a particular country but they can also set the entire country years back in respect to outsourcing.
So what are some of the precautions outsourcing companies can take to mitigate their chances of loss?
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As outsourcing becomes more widely practiced the complexities and risks multiply proportionately. Some of the risks are pretty obvious and are foremost in the mind of the outsourcer thus receiving more attention.
But there are some other not so obvious risks, which, as a result, may not be studied and looked at as closely. They, however, for this very reason, could be more detrimental in the long run.
The possibility loss of Institutional Knowledge Loss is one such risk, and the amount of risk is proportionately higher when the quantity of outsourcing tasks is greater. As a result of this type of loss the outsourcer could lose the ability to maintain insight into technology and fundamental business processes.
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One would not deny that there are several risks in outsourcing, but are they insurmountable and are they worth it? That is ultimately up to the individual firm to decide. All too often outsourcing is considered as having a high failure rate and the experts say this is most often due to differences in expectations between the outsourcer and the service provider, and insufficient due diligence on the vendor by the outsourcer and vice versa.
It is extremely important, therefore, that both, the client and the vendor carry out due diligence on each other.
In all likelihood the outsourcing vendor has been selected on the basis of certain criteria; now due diligence will reveal the vendor’s potential and competence. The study will reveal whether the goals and purposes and desired results will possibly be met.
The vendor’s due diligence will, in turn, allow him to evaluate the proposal, and perfect the final proposal upon which the relationship will depend.
The vendor uses this opportunity to weigh the soundness of the conjectures, and extent of the undertaking. He will have a better idea of the type of work required, at what cost and what the terms and conditions of he outsourcing project will need be.
This due diligence for both parties should include the actual viewing of infrastructure, examination of documentation, cross referencing, and interviewing important staff.
In either case, due diligence will allow for modifying and improving both, the buyer’s objectives, and the seller’s final proposal. It will allow both to evaluate the outsourcing relationship besides minimizing the chances of failure of the relationship and the outsourcing project.

There appears to be a backslide in the number of outsourcing megadeals being made each year.
Gartner, Inc. the world’s leading information technology research and advisory company reports that 2007 saw fewer outsourcing megadeals (those valued at over $1 billion) being made last year than in 2006. Whereas 12 megadeals were endorsed in the previous year, only 10 were reached in 2007.
Compare this to 16 such deals in 2003.
In all the average contract value had has dropped from $2.6bn in 2006 to $1.2bn in 2007, which works out to the lowest level since 2000. The total contract value works out to just $12bn.
However, these outsourcing megadeals constitute a measly 6.8 percent of the total number of contracts in 2007, and represent a little less than 40% of the total outsourcing contract value for that period. The lion’s share of this goes to smaller deals of less than $50m. Their numbers are increasing and now comprise 39.5 percent of all the contracts.
Gartner feels that these decreasing outsourcing megadeal numbers could be a sign of a move towards multi-sourcing, with companies looking to several providers for the delivery of business and IT services.
Research director of Gartner, Kurt Potter, also states that, “Many clients want to test providers’ contracting practices, capabilities and cultures before moving favoured providers into larger contracts, or organisations are using smaller doses of outsourcing to delay larger outsourcing adventures.”

In what can only be termed a remarkable development, the Bar Council of England and Wales has invited members of the Bombay Bar Association to an honorary three day visit to their courts of law.
In a few days, next Wednesday, to be exact, a dozen Indian lawyers accompanied by a trio of solicitors nominated by the Law Society are slated to meet Judges from the House of Lords, interact with British lawyers and be present at court hearings and seminars. The seminars and discussions will cover topics like judicial review procedures, cross-border litigation, administrative law and intellectual rights.
The International Relations Manager of the Bar Council of England and Wales, Christian Wisskirchen, states it is hoped that the visit will boost the understanding of the English and Welsh legal systems particularly in relation to commercial law.
Finally the lucky group from the Bombay Bar Association will attend a dinner hosted by the English Bar Council and England’s Specialist Bar Association.
It is hoped that the milestone visit will advance relations between the two bars and will improve prospects for budding Indian lawyers.
At present neither Indian lawyers nor English lawyers are permitted to practice in each other’s courts. But Indian courts do allow lawyers from abroad to practice in Indian courts when Indian lawyers are permitted to practice in their respective country. It is hoped that visits like these would mellow the situation further.

Although most law firms accede to the fact that legal outsourcing, especially to India is now a reality, different lawyers have different opinions about it.
Here are some opinions.
Rob Hyndman, technology business lawyer, Toronto, Ontario, Canada: …And at least among lawyers, it’s a pretty notorious fact that in the big firms the work performed by juniors is (too) often completely unsupervised and not adequately reviewed for quality. The firms treat it as ’sink-or-swim’ training, and for that purpose it’s ultimately quite effective. But as to quality control, it’s often effectively outsourced blindly. My suspicion is that work outsourced to India is, at least in that regard, often of superior quality. And I see no difference between outsourcing to a junior, for review by the lead lawyer, and outsourcing to India, for the same review.
Jerome Shestack, former president American Bar Association, head of litigation Wolf, Block, Schorr and Solis-Cohen. “I think a lawyer has a responsibility over his work and he just can-t delegate it…The problem with outsourcing is, how do you keep control over it? How do you see how it’s being done?” …
“Yes, I do have concern about confidence, confidentiality, privacy, conflict of interest, ethical values, and those are issues are a real concern.”
Larry Newman, specialist in corporate transactions: “They have been instrumental in getting favorable results even in complex cases.”
Prism Legal’s Ron Friedmann, member NYC Large Law Firm KM Group: I’ve talked to lawyers who-d like to explore offshoring document review and to CIOs who want to investigate outsourcing help desks. So in my experience, outsourcing is not hype but serious consideration of this option, however, does not guarantee rapid growth. ”

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.