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Protecting Yourself in an Outsourcing Situation

Outsourcing software development is a tricky process in any situation. You are essentially entering into a partnership with another company to take ownership over a mission critical part of your organization and entrusting not only your IT infrastructure to them but many times significant intellectual property that must be protected to assure your survival as a business.

Even within a company, there are some levels of security that are kept in place to protect highly sensitive intellectual property even from your own employees. So to turn over that crucial information to an external agency is not only risky, it must be done with extreme care to protect your IP and to assure that it’s security is not compromised at all costs.

It is essential before you put out the RFP for outsourcing that the issue of the protection of intellectual property become part of the initial requirements definition that is central to the selection of the outsourcing agency. Whether the project to be outsourced is a single software project or management of your entire IT infrastructure, there will be a level of trust and disclosure that goes on between your company and the companying taking over this function from you. Not only must IP security be observed in all formal communications, it should become a priority even at the employee level as your staff interacts with the outsourcing company’s staff during the project development life cycle.

This is where the due diligence process must be executed at the highest level of intensity to assure that the company you chose to take over this part of your IT development passes all security background checks. Depending on the level of sensitivity of your intellectual property, the security of your competitive intelligence may justify paying a higher cost for a reliable outsourcing partner rather than putting cost savings too high in the selection criteria which may result in you partnering with an outsourcing company who is not as reliable in this area as they ought to be.

The intellectual property issue becomes even more of a priority if you are considering outsourcing your software development offshore. In the last decade outsourcing these functions to companies in India and other countries in that region has become popular. The cost savings of handling software development are considerable and can give your company a competitive advantage because it enables you to come to the marketplace with a viable product at a lower cost.

Keep in mind, however, that from a cultural point of view, many countries in the Middle East, and the Far East do not have the same laws or cultural sensitivities to intellectual property issues as we do here in the west. To put it bluntly, many companies that may be on your short list for outsourcing may have no idea that protecting your trade secrets has any value at all. In these countries, the concept that ideas are property or that plagiarism or outright theft of another company’s IP is wrong is not in their thought processes at all. It isn’t that they are being deliberately crooked by compromising your security. It just isn’t part of their culture.

Therefore take extreme care when selecting any outsourcing agency and this is of the highest concern when outsourcing overseas. By making protection of your trade secrets a high priority from the project definition level and going forward, you are being prudent to protect that one thing that gives your company the ability to compete in your markets and that is your intellectual property.

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