In the last article of this outsourcing series, I will be offering some tips based on my experience and identifying some definite traps for the unwary, in dealing with many of the key outsourcing agreement provisions not addressed in the previous articles. Because failure to properly address some of these issues may favor the service provider rather than the customer, some of the following suggestions may appear biased toward the customer, but the intent here is to illuminate the issues.
A commonly overlooked area in outsourcing relationships is the necessity for third-party consents. If the customer has not been previously proactive in seeking outsourcing-friendly language in its vendor agreements, it may find that its software and other license agreements may not permit use by the proposed service provider. Both parties should make the review of third-party issues a significant element of their due diligence prior to negotiations as these issues can have significant effects on the timing and economics of a transaction.