Strategic CIO // IT Strategy
04:44 PM

Outsourcing Bill Of Rights Proposed

Satyam's financial fraud scandal has one services vendor pushing for an industry-wide set of ethics to ease outsourcing fears.

Has Satyam's financial fraud scandal made you more suspicious of your offshore vendors?

One IT services company is trying to get the ball rolling in creating an industry-wide "IT Partners Bill Of Rights" to ease client worries about outsourcing.

Alliance Global Services, a privately held IT services firm, is aiming to gain industry support in establishing standardized rules of engagement for clients and vendors in their IT outsourcing relationships. Alliance employs about 500 consultants worldwide; is based in Philadelphia with operations in several U.S. cities and Hyderabad, India; and generates about $50 million in revenue annually, said Alliance CEO John Castleman.

The IT Partners Bill of Rights drafted so far by Alliance includes 10 rules that cover issues ranging from transparency in the financial viability of an IT vendor to the ability to terminate a relationship without financial penalty in the event of any admitted fraudulent activity.

Those happen to be among the messy problems Satyam clients are struggling with in the aftermath of Satyam's admitted fraud earlier this month.

Alliance's bill of rights is just an early draft of what the company hopes will be a document embraced by other IT vendors. In fact, the company is seeking input from competitors, CIOs, and other business technology leaders to create a final set of rules that would be adopted industry-wide, Castleman said.

"Even if we can agree on five points, the goal is to get a public dialogue for creating a baseline of standards that restores trust in outsourcing partnerships," said Castleman. "We're in a services business> If your customers don't trust you, it won't be a successful partnership."

The points Alliance has included in its draft bill of rights are principles the company already incorporates in its dealings with clients, said Castleman. "We are very open and transparent in our client relationships," he said.

Alliance is hoping to get 100,000 signatures supporting some version of its bill of rights and to have the document serve as a platform to establish a global ethic consortium for IT services vendors.

Below is the full list of Alliance's proposed IT partner "rights."

  1. The right to demand transparency throughout every step of an engagement -- from sales to contracting to delivery and termination
  2. The right to fully understand the nature and character of an IT partner and the service that it provides to them
  3. The right to fully understand the financial viability of an IT partner
  4. The right to be made aware of any impending legal charges against an IT partner, should they arise, as soon as they occur
  5. The right to arrive at a mutually agreed upon definition of the term "trusted partner"
  6. The right to expect a clear contract that defines fees and expenses up front before any agreement is signed
  7. The right to terminate a relationship with no financial penalty in the event of any admitted fraudulent activity
  8. The right to demand the existence of a truly independent board of advisers
  9. The right to expect the presence of an independent financial auditor accompanied by a set of checks and balances
  10. The right to demand accountability for any actions taken within the scope of a technology project or as part of a firm's broader business practices

Even if no other vendors adopt the proposed bill of rights, Alliance said it will continue to operate its business on those principles, he said. However, he added, having other companies embrace the same set of ethics helps level the playing field among competitors.

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