On Outsourcing with Dutch and Swedish Businessmen

In March, a workshop on legal aspect of outsourcing took place in the Media Lounge of the Slovak office of ROWAN LEGAL in Bratislava, Slovak Republic. Coordinated by Tomáš Nielsen, an attorney-of-law of ROWAN LEGAL, over thirty participants representing the member companies of the Swedish and Dutch Chambers of Commerce discussed the contemporary trends, issues and methods of their addressing in the field of outsourcing, paying thorough attention to the following set of key outsourcing project rules:

Provide Services? Offer Partnership!

Engaged in outsourcing, both parties should bear in mind that the project is to be based on partnership, rather than on a classical model of one party providing services and the other paying for the services rendered. Moreover, both parties should truly co-operate with one another, listening to the needs and requirements both of their own and of the other party.

Be Open

Outsourcing ranks among business models requiring the partners to be as open and pro-active as possible. Hiding potential hazards and risks almost always results in a complete failure of the project. Adopting an open approach and communicating duly, on the other hand, may help a great deal of potential problems arising in the course of the project be eliminated or minimised.

Do Not Underestimate Initial and Exit Outsourcing Stages

Planning to use outsourcing in their processes, companies often pay too much attention to specifying the performance, ignoring the initial and final outsourcing stages (exit plans) completely. To save the implementation stage from addressing unexpected but well-predictable issues, the present situation, contractual terms and conditions, etc. must always be analysed thoroughly. The same is true for the final outsourcing stage since the project finalisation mode – whether ordinary (expiration of a period, termination, etc.) or extraordinary (withdrawing from the contract for the breach of contractual obligations by the other party) – always needs to be addressed by the parties. Methods of transferring the outsourced activities on a new partner or back on the customer itself – including the newly developed software, staff and other parts of the transferable activities providing for an easy and uninterrupted operation – should always be specified in the exit plans.

Conclude High-Quality and Balanced Contract

Both potential disputes and outsourcing implementation stage should always be carried out under a high-quality and well-balanced contract with the terms used within the project and obligations of the parties clearly and unambiguously defined. Drafting a contract, the parties should bear in mind that the contract needs to be interpreted uniformly both by the contractual partners and third parties (e.g. for the purpose of a dispute being resolved by an independent judge or arbitrator). Since true partnership is the key to successful outsourcing, the contract additionally needs to be well-balanced. Sometimes, the stronger party tends to make the weaker party adopt less accommodating terms – a sheer way to hell, indeed. Although a subject to tough business negotiations, the final contractual terms and conditions need to accommodate both parties equally.

Update Backup and Exit Plans

Although prepared thoroughly, various contingency and exit plans are then often left unattended and completely non-updated by the companies. Needless to say these plans are effective only if reflecting the present situation – each and every change in the contractual and/or business terms and conditions needs to immediately be reflected in relevant documents and processes; not updated, the contingency and exit plans (as well as documents recording the project status and development) turn into nothing but mere formal documents.

Do Not Forget Specifics

Unique in its own way, almost each outsourcing project is specific, whether due to the outsourcing subject-matter (personal data, confidential information, trade secret, etc.) or the outsourced project itself (information technologies subject to the Copyright Act, etc.). Engaged in the very initial negotiations for the contractual terms and conditions, the parties shall take these specifics in mind and arrange for their due provision in the contract itself.

Organised by the Swedish Chamber of Commerce in Slovakia, the workshop was held in co-operation with the Dutch Chamber of Commerce and ROWAN LEGAL, law firm.