Protecting Buyers In A BPO Contract
Business Process Outsourcing (BPO) can give companies a decided advantage in today's marketplace. However, four legal issues have the power to derail an outsourcing contract's success. If buyers include legal protections in their outsourcing contracts, they can enjoy the advantages BPO outsourcing brings, according to attorney David Pace, a partner in the Dallas office of Arter & Hadden LLP.
BPO is growing because companies want to focus on their core businesses. Pace says there is a growing sense in today's marketplace that companies need to shed their ancillary processes. "Then they are not distracted from focusing on what they do for a living," he says.
BPO also provides an accounting advantage. If a buyer sells its plant and equipment to the outsourcer, these items disappear from the asset side of the balance sheet. Now there's no need to depreciate them over a number of years. Instead, these costs migrate to the expense side of the ledger as a cost of goods sold. Companies can deduct these expenses in the year they were taken, if it so chooses. Pace calls this "financial engineering."
Outsourcing a process also means the buyer no longer has to manage the head count. This is an attractive benefit in today's tight labor market. The unemployment rate in May was 4.1 percent. Recruiting and retaining talent in a tight market is difficult. The level of difficulty increases with the specialized knowledge required. The outsourcer, on the other hand, is adept at attracting the best and the brightest in its field.Outsourcing a process also means the buyer no longer has to manage the head count. This is an attractive benefit in today's tight labor market. The unemployment rate in May was 4.1 percent. Recruiting and retaining talent in a tight market is difficult. The level of difficulty increases with the specialized knowledge required. The outsourcer, on the other hand, is adept at attracting the best and the brightest in its field.
source and full story:
http://www.bpo-outsourcing-journal.com/jul2000-legal.html
Business Process Outsourcing (BPO) can give companies a decided advantage in today's marketplace. However, four legal issues have the power to derail an outsourcing contract's success. If buyers include legal protections in their outsourcing contracts, they can enjoy the advantages BPO outsourcing brings, according to attorney David Pace, a partner in the Dallas office of Arter & Hadden LLP.
BPO is growing because companies want to focus on their core businesses. Pace says there is a growing sense in today's marketplace that companies need to shed their ancillary processes. "Then they are not distracted from focusing on what they do for a living," he says.
BPO also provides an accounting advantage. If a buyer sells its plant and equipment to the outsourcer, these items disappear from the asset side of the balance sheet. Now there's no need to depreciate them over a number of years. Instead, these costs migrate to the expense side of the ledger as a cost of goods sold. Companies can deduct these expenses in the year they were taken, if it so chooses. Pace calls this "financial engineering."
Outsourcing a process also means the buyer no longer has to manage the head count. This is an attractive benefit in today's tight labor market. The unemployment rate in May was 4.1 percent. Recruiting and retaining talent in a tight market is difficult. The level of difficulty increases with the specialized knowledge required. The outsourcer, on the other hand, is adept at attracting the best and the brightest in its field.Outsourcing a process also means the buyer no longer has to manage the head count. This is an attractive benefit in today's tight labor market. The unemployment rate in May was 4.1 percent. Recruiting and retaining talent in a tight market is difficult. The level of difficulty increases with the specialized knowledge required. The outsourcer, on the other hand, is adept at attracting the best and the brightest in its field.
source and full story:
http://www.bpo-outsourcing-journal.com/jul2000-legal.html
Labels: bpo, business process outsourcing
posted by Manoj Jain @ 10:29 PM
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