Post-Satyam, companies add fresh clauses to contracts
Global customers are keen to introduce additional security clauses in contracts to ensure safety in case of any crisis.Funnier side of Satyam saga! | Fall of Satyam
By Mini Joseph Tejaswi, TNN |
BANGALORE: Call it the Satyam effect or just precautionary measures during turmoil. Global outsourcers are busy adding fresh clauses to contracts given to Indian vendors to ensure business continuity.
While there is widespread recognition that there is no substitute to India as an outsourcing destination, global customers are keen to introduce additional security clauses in contracts to ensure safety in case of any crisis.
Some are even considering addition of a ���project portability clause������, wherein they would be able to move projects entirely to other providers, to ensure safety and work continuity. Some insist that vendors maintain ���buffer providers������ so that work does not suffer in case of any untoward incident.
Stephanie Moore, former VP at Forrester Research and currently chief marketing officer of UST Global, says: ���There���s a lot of caution in the minds of customers today. They want to have a thorough look at vendors prior to entering into any work commitment. Today they are concerned about providers��� corporate governance, infrastructure, actual financial status, audit processes, HR policies, etc.������
Gartner principle research analyst Diptarup Chakraborti said, ���They are realigning projects, slashing down components in a project, renegotiating prices, and cutting delivery cycles, as priorities have changed. They want to make contractual clauses more stringent making providers much more accountable.������
Satyam or no Satyam, the single vendor days are over, says Sudin Apte, head of Forrester India. However, he says, such project portability clauses are not always feasible when it comes to very large multigeography projects. ���It���s ideal when it comes to medium and small projects,������ adds Apte.
While there is widespread recognition that there is no substitute to India as an outsourcing destination, global customers are keen to introduce additional security clauses in contracts to ensure safety in case of any crisis.
Some are even considering addition of a ���project portability clause������, wherein they would be able to move projects entirely to other providers, to ensure safety and work continuity. Some insist that vendors maintain ���buffer providers������ so that work does not suffer in case of any untoward incident.
Stephanie Moore, former VP at Forrester Research and currently chief marketing officer of UST Global, says: ���There���s a lot of caution in the minds of customers today. They want to have a thorough look at vendors prior to entering into any work commitment. Today they are concerned about providers��� corporate governance, infrastructure, actual financial status, audit processes, HR policies, etc.������
Gartner principle research analyst Diptarup Chakraborti said, ���They are realigning projects, slashing down components in a project, renegotiating prices, and cutting delivery cycles, as priorities have changed. They want to make contractual clauses more stringent making providers much more accountable.������
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Satyam or no Satyam, the single vendor days are over, says Sudin Apte, head of Forrester India. However, he says, such project portability clauses are not always feasible when it comes to very large multigeography projects. ���It���s ideal when it comes to medium and small projects,������ adds Apte.
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