Monday, January 26, 2009

IT outsourcing contracts merit review given scandal at Indian firm

“Satyam scandal will have ramifications across the industry if Satyam customers flee and take their business to other IT outsourcers”

Rachel Lebeaux of Search CIO writes in her latest reporting that Customers of any IT outsourcer that runs into trouble should consider renegotiating their IT outsourcing contract, and make sure they have the documentation and staffing needed to take their business elsewhere, experts said this week in the wake of the financial scandal at Indian IT services firm Satyam Computer Services Ltd.

She further goes on to say that "even if a crisis is limited to one provider, CIOs with any outsourcing contracts have work to do, to make sure their projects or levels of service are uninterrupted."

News broke last week that Satyam, a 22-year-old global IT services firm based in Hyderabad, India, had been listing assets far in excess of what it actually held, a scandal that has been referred to by some as "India's Enron." The "financial irregularities," disclosed by the firm's founder, were followed by other allegations. The company denies these charges.

Source: SearchCIO

1 comment:

Anonymous said...

Outsourcing is not my cup of tea, when everyone else was saying WOW this is going to save us heaps, I was always thinking its a going to cost more in the long run to safeguard the very same products/services that are outsourced. Last straw was when the banks off-shored banking services, someone else having security details to my money (not good) how do I know they are not reselling my details onto cybercrime gangs !