The American Law Institute (ALI), a preeminent legal think tank, recently approved Principles of the Law of Software Contracts, thereby taking a major step toward clarifying the often confusing, and sometimes contradictory, legal maze that has arisen in the United States regarding contracts that deal with software rights and obligations, as many outsourcing agreements do.

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Outsourcing is now a 30 year-old industry, and by and large, the industry hasn’t learned to form sustainable relationships. Of course, there are a number of great, long-term sustainable agreements out there, but you rarely hear about them. The marriage analogy is overused when it comes to outsourcing, but nonetheless true. How many of us would enter a marriage with the expectation that it will ultimately dissolve? Outsourcers and their clients have learned over the years to distrust each other’s motives, and not surprisingly their behaviors have become a self-fulfilling prophecy: “I believe you are out to get me, so I will get you first.”

The good news is that sustainable relationships are not only possible, but they are out there. Alsbridge builds them all the time. In fact, we approach each engagement with a simple definition of success: to leave behind a sustainable, mutually beneficial, fair relationship between our clients and the provider we help them select. It takes just a little extra effort, but a lot of attitude adjustment.

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As analysts, it’s easy to get excited with high-growth markets, but supply management BPO's different. 

Phil Fersht, Director of Global Business Services & Outsourcing Research, AMR Research & Authors of “Horses for Sources” 

While the market has grown exponentially, and a 30% increased expenditure last year is eye-opening, the nature of these engagements doesn't give us confidence that this market will sustain its growth trajectory unless customers think beyond short-term labor arbitrage, and service providers introduce significant process and technology enhancements to the early adopters to help them optimize their delivery.  This "lift and shift" model could well result in customers losing more than they save.

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