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When it comes to offshoring, do your homework!

Wed, Jul 28, 2010

Offshoring

Doing workAs we’ve written in many different posts here, offshoring can indeed help businesses of all sizes get to that next level, increase innovation, allow greater focus on their core competencies, etc. But, as with almost anything business-related, there are of course inherent risks related to these potential rewards.

For example, analyst studies continue to indicate that when it comes to offshoring, not all contractual agreements between businesses and vendors are created equal. In fact, the majority of these contracts are sorely lacking when it comes to protecting businesses from some potentially huge problems down the road.

Business Week reports on a recent Gartner study indicating that in many cases, the language contained in these agreements is still way too lax to protect most businesses from all manner of pitfalls ‘“ chief among them those involving intellectual property rights.

As the Gartner study indicates, this is an ongoing thorny issue, and business leaders MUST do the sufficient homework upfront about specific laws and safeguards in place, or the lack thereof, for each country they may be considering for their offshoring needs. Depending on what type of industry you’re in, and depending on what you’re looking for in terms of help, choosing ‘Country X’ over ‘Country Y’ may come down to how comprehensive their respective legal/legislative systems are in protecting the rights of companies doing offshoring business within their borders.

All the top companies know they must do the required, upfront homework whenever they are entering a new area – offshoring agreements are certainly no exception!

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