Outsourcing agreements

What is an outsourcing agreement?

The benefits for businesses that outsource their Information Technology (“IT”) may include lower IT costs, and the ability to scale up their operations in their core products and services as and when required. Businesses may gain from using the expertise of the outsourcing company’s engineers, management and support staff. This is particularly useful if IT is not your business’s core competency or industry.

Outsourcing may cover any or all IT system operations, with some organizations choosing to outsource their whole IT requirements. In these instances, they tend to work closely with an outsourcing service provider, at home or abroad.

The types of operations that are usually outsourced include the running of desktop and server applications, business processes, backup and recovery, customer services and billing.

Do you need an attorney to review an outsourcing agreement?

Yes – Outsourcing contracts can be very complex, but a good outsourcing contract will examine roles and responsibilities, applicable laws, service level agreements, penalties and rewards, timeframes and measurements, regular reviews, and exit strategies.

An attorney with outsourcing experience can help your business understand the associated risks with IT outsourcing agreements and help propose a fair allocation of duties, obligations, and risks.

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