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Ways to Resolve Problems in IT Outsourcing

by: Sarah Joson

Thursday, October 2, 2014 |

Issues in outsourcing contracts have become inevitable over the years, and no matter how hard an outsourcing service provider or the client tries to resolve the issues, it may result to targets that are not met and poor quality of outcomes in the long run. Unresolved arguments and issues are accumulated over time and as these things build up, it will be harder to handle and solve. This then impacts the client-provider relationship and each partyís business as well.

CIO.com lists down things that outsourcing clients can do during the contract negotiation process to alleviate dispute challenges:  

Take your time in creating the contract.
Yes, itís the most obvious strategy out there but would you rather have multiple problems because of a missing or a misinterpreted clause in the contract that created several loopholes? We all have deadlines to meet, but overlooking crucial details during the contract creation process can ignite a whole lot of trouble.

Customize a dispute resolution process based on the nature of your business.

One of the most common things in the outsourcing industry is majority of suppliers, procurement organizations, and lawyers have a prototype for everything - including dispute resolution practices. With that, outsourcing buyers should decide on which process will be most effective for them - from the reporting of the incident and monitoring, to how a solution will be carried out. For companies that are employing several service providers, this will be more useful because they would have to resolve different problems across several IT service providers.

Create a clause that will make you the reference.
Draw up scenarios that are likely to happen, based on how your business operates. After that, ask the providers if itís possible to include those as a clause in the contract since it is very likely to happen and you want to protect the company. This creates a better platform for client-customer relationships since all you need to do is assist them should anything go wrong in the future. This will also show that you want to have a continuous operation. Some of the quick solutions for possible scenarios are approval or removal of key employees, right to terminate, right to withhold disputed charges, and right to insource or use other service providers.

Make everything official.
To avoid finger-pointing and to show that you are serious about what you said during the meeting, put it in writing and expedite it accordingly. Store it in a place where it can be retrieved and accessed - but not tampered with, by both parties. A lot of these documents are currently spread across several divisions from both parties, making the dispute resolution process more complicated.

Be open to a give-and-take relationship.
There will be instances wherein clients may want to add something to the deal, and providers are feeling the same thing. By being open to this type of setup, you will get what you want - provided that what you want is still reasonable and can be achieved by the provider, and in turn, be ready to do the same.

Clarify accountability and roles.

Appoint a middleman who will be in-charge of the changes to the contract. This way, all the final decisions are unbiased and employees will not think negatively of the changes in the contract or operation, whether those affect them directly or not.

Have an emergency clause handy for sudden changes.
In the outsourcing world, this is often called the accelerated dispute resolution cause. This denotes that should there be additional work in the middle of the contract, the provider can file disputes but is subject to proper explanation of surcharges caused by the changes.

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