FEATURE
Risks and Advantages of Using Offshore Vendors By CHRISTOPHER SLOAN AND ANDREW DROKE
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or years now, engaging vendors in other countries to provide business process or technical services has been a potentially useful way for U.S.based companies to obtain skilled work at a reduced cost. However, as remote work has become more ubiquitous, many organizations that have not previously done so are assessing how to best leverage the opportunities presented by offshore vendors. From developers and engineers to fully outsourced IT capabilities, these international resources can
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deliver expertise and increase productivity. These opportunities, however, also present unique risks and considerations for U.S.-based organizations. Although many companies have robust vendor management programs, there are several unique issues associated with offshore vendors. Below are some of the important legal and risk issues to be reviewed when considering an offshore vendor.
SHARING DATA Both contractual and regulatory obligations can restrict a
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company’s ability to transfer, store and process certain data outside of the United States. Thus, a critical first step is to determine whether the organization is permitted to send information abroad and, if so, what contractual and regulatory requirements apply. For example, many customer contracts and data privacy or security agreements specifically restrict the use of offshore vendors or storage of personal information outside of the United States, or require obtaining the consent of the other party. BACK TO CONTENTS
