Set It And Forget It?

Today, I was once again reminded of the fact that in-house managers rarely learn enough about the legal aspects of the deals that they manage. A well-negotiated, well-lawyered deal often contains significant cost or margin protection, as well as obligations to perform duties that may be “out of the ordinary.”

The Political Perspective of Outsourcing

In this election, outsourcing is getting a lot of heat from the left as a force destructive to our economy.   The right, on the other hand, seems to believe that outsourcing is generally good for the economy.   The Indian press seems scared.   Which is it?

Conference Notice – Legal Process Outsourcing

In late October, the IQPC Legal Process Outsourcing conference is happening in Chicago.  It’s a great conference for those interested in LPO matters.

The link can be found here.

Develop Your Risk Profile In Advance

One of the major sticking points in most outsourcing and services deals is risk allocation.  If the supplier is presenting the paper, risk will generally allocated entirely to the customer.  If the customer is presenting the paper, risk will be allocated entirely to the supplier.  Then, after the business terms are agreed upon, long, drawn-out discussions surrounding warranties, indemnities and limitations of liability ensue.  This occurs in nearly every deal – and those of us in the practice have our “canned” reasons why our position is proper and important.

My Favorite Companies: Apple, Southwest and Toyota

Topping my list of favorite companies are Apple, Southwest and Toyota.  Why?  Because they unerringly meet my expectations.  That is what I expect out of a company, whether they insource everything or outsource everything.

More Evidence of Market Fragmentation

This year’s TiECon East conference focused on the continued likely growth in outsourcing to India – seeking to dispel rumors of a bubble in the outsourcing market.  While this is not surprising – TiECon is the conference of the Trans Indus Entrepreneur organization – and may, in fact, prove true – that assertion was not the news in this article.

More interesting was the presentation given by Malcolm Frank, the chief strategy officer of Cognizant, which asserted that the days of “Offshore-R-Us” is over, and that “[s]ubject matter expertise is really important to [customers]. In retail, you want a company with point-of-sale experience. In pharmaceuticals, you want a company that has experience with clinical trials.”

If this assertion is true, the door may open for boutique organizations that can develop specific expertise.  However, the counterpoint is that it will become more difficult for new companies to enter the offshoring market and existing companies to grow into new, unrelated, lines of business.

On the other hand, the article points out that market saturation for Indian outsourcing is 10% in the U.S. and only 1% in Europe.  If these markets can be encouraged to grow, there may be room for new entrants.

For more on the article, click this link.

Does Risk Awareness Cost Too Much?

In recent years, it seems as if corporate decision making has become increasingly risk driven.  Compliance requirements are seen as a key driver – because of some of the corporate excesses of the recent past, complex regulations like Sarbannes-Oxley have unquestionably increased the difficulty of addressing compliance issues.

LOI’s and Outsourcing Agreements

In a recent article published on Law.com, W. Carter Santos makes an argument against using Letters of Intent (LOI’s) to move projects forward when the negotiations of an outsourcing deal become protracted. His primary argument is that the customer looses substantial leverage by letting the vendor begin work prior to the signing of the deal.

Customer Service – The Way it should Be

Just moments after I wrote this morning’s post, my computer, a six-month old MacBook, froze.  After several attempts at restarting and some web research, I called AppleCare.  The agent, clearly domestic and probably an Apple employee, walked me through several, ultimately futile steps.  He then suggested that I take it to my local Apple Store and made an appointment for me for 2 hours later. 

Trouble in Paradise?

In an article in today’s India Daily, (link) Hrithik Ratnagar suggests trouble for the Indian IT outsourcing segment.  According to Mr. Ratnagar, this trouble is caused by the slowdown in the US economy, the weakness of the dollar and the strength of the rupee, the US political climate, and internal factors within the Indian IT outsourcing community. 

No doubt, these are all significant factors in the market.  However, I think that the Indian IT market may be selling a product that it’s US consumers are beginning look away from.  Why?  Several reasons.