In the wake of events such as the admission of fraud by Satyam's CEO and recent terrorist attacks, sourcing professionals have been forced to consider whether they really enjoy the protections they thought they had already established contractually with their providers.
In revisiting the suitability of contractual protections, sourcing teams also should revisit existing approaches adopt new strategies for emerging threats. These dangers include: the current economic conditions, which are pushing sourcing pros to focus almost exclusively on cost, to the potential detriment of risk management; geographic instability, which has caused disruptions in offshore locations; and vendor instability, such as Satyams fall from grace and the more recent Chapter 11 bankruptcy filing of BearingPoint, which highlights how much business risk is associated with work done by outsourcers.
Source: CIO