In my previous blog post I talked about the challenges clients face when picking an outsourcing vendor. (see here for the blog post Part 1)
The problem of how to ensure that the Intellectual Property is safeguarded is less of a problem for bigger companies dealing with bigger outsourcing providers. There is a certain advantage to be gained by going for size...and I vouch to say that bigger, in most cases, is better when it comes to the protection of a companies IP.
For smaller companies looking to get a limited project done though the bigger outsourcing vendors are not really an option. Most of the bigger and reputable BPO vendors won't even enter into a relationship unless the annual revenue out of the contract exceeds at least 500 k.
As such a lot of domestic companies are usually stuck with one of two scenarios:
Either develop onshore and pay onshore pricing or develop offshore and take all the risks associated with it. Unfortunately either one of those options are not ideal.
There is though a third option available to flexible outsourcing vendors and their clients which offers the benefit of outsourced pricing while offering maximum legal protection and avenue for recourse to the company.
We offer our clients to contract our services through a domestic corporation. (US based). A jurisdiction is chosen which is satisfactory to the client. Additionally, and only if the client desires, we do offer arbitration instead of court litigation. (we ordinarily use JAMS).
The key point is that the US company our client contracts with carries an errors and omissions policy with an insured value on every claim well in excess of any conceivable damages.
We find that clients who are concerned about the reach of law and the ability to enforce a legal claim are more than happy to pay the small premium in rates over our offshore/Non Us pricing to gain the piece of mind needed.
No one buys insurance on a vehicle expecting it to be used. In the unfortunate event that is has to be used it will remove financial damages and offers a needed comfort level.
An outsourcing partner which offers a strong errors and omissions policy should be looked at the same way. No one expects it to be used (or wants it)...but in the unfortunate event that is needs to be used it offers a mechanism to get properly compensated.