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Outsourcing describes the wide variety of arrangements in which the requirements of an organisation which are traditionally performed by its own employees are contracted out to a service provider. Outsourcing may only relate to a small aspect of the IT requirements of an operation (eg. procurement of help desk support from an external service provider) through facilities management (where the customer retains its IT assets but they are operated and maintained by a service provider) to full blown IT outsourcing arrangements where personnel, hardware, infrastructure, software licences and other assets are transferred to the service provider.

Outsourcing offers significant opportunities for cost savings, redeployment of capital and step improvements in the nature of the IT services available to an organisation. It also has very substantial risks.

Most businesses would regard aspects of their IT functions as mission critical. Many outsourcing arrangements require that these crucial functions be entrusted to a third party. Accordingly, outsourcing contracts must contain provisions designed to ensure that these functions are performed to satisfactory service levels and to ensure that the crucial functions will continue to be performed if the contract is terminated for any reason.

Outsourcing contracts are usually long term arrangements and accordingly they must be structured to allow for change in the scope or nature of services necessary to accommodate changes in the customer’s business operations.

We represent a number of service providers and customers with respect to outsourcing including one of the largest outsourcing service providers in the world.