TECHNOLOGY, OUTSOURCING, AND COMMERCIAL TRANSACTIONS
NEWS FOR LAWYERS AND SOURCING PROFESSIONALS

In his article for the American Institute for Contemporary German Studies, Morgan Lewis of counsel Axel Spies discusses some of the initial response to the self-certification process for US organizations to participate in the EU-US Privacy Shield Framework (Privacy Shield), which the National Telecommunications & Information Administration (NTIA) launched on August 1.

In partner Barbara Melby’s interview with Nearshore Americas, she offers advice for ensuring that outsourcing agreements are up-to-date and reflect the contemporary risks facing the industry. She discussed the ways transition is crucial to an outsourcing’s success and the need to proactively address security requirements, define a clear process for compliance audits, and handle dealing certifications and reporting often required in regulated industries. The interview also addresses the need to carefully address implementation, costs, and risk shifting for automation and other new technologies in outsourcing agreements.

Read the complete interview >

On August 8, France adopted a revised labor law titled Work, Modernization of Social Dialogue, and Securing of Professional Processes, which modified the rules relating to transferring employment contracts under French law. In their LawFlash (Changes to Transferring Employment Contracts in France After the 8 August Law), partner Sabine Smith-Vidal and associate Charles Dauthier examine the changes introduced by this new law, which may apply to transferring employees in an outsourcing.

During Philadelphia partners Barbara Melby and Michael Pillion’s webinar “The Next Frontier: How Robots and Automation Are Changing Outsourcing and Technology Agreements,” they will discuss sourcing and technology issues affecting the future of outsourcing and technology contracts.

Topics will include the following:

  • Adjusting to shifts in services and pricing models
  • Addressing robotics and automation in scope and service-level documents
  • Capturing the efficiencies of automation in the short and long term
  • Changing personnel, pricing, and intellectual property provisions

The webinar will be held on Wednesday, September 28 from 12:00 to 1:00 p.m. eastern time. Learn more and register >

In partner Barbara Melby and associate Chris Archer’s article for SIG’s Inside Sourcing Newsletter, they discuss obstacles in existing outsourcing agreements that could affect a customer's ability to replace incumbent vendors and identify several key issues that sourcing and legal advisers should consider when preparing and executing a customer’s resourcing strategy. The issues they identify include the need to appropriately leverage performance data, how to understand termination and exit rights, and key provisions to consider on the front-end of contract negotiations to help avoid some of resourcing’s challenges at the end of the relationship.

Read the complete article >

Robotics and automation are hot. But what do they really mean in the context of your IT outsourcing contract? At least for now, they are not about robots rolling around the data center floor or application development center. Robotics and automation are about software and tools that allow for automated processing, monitoring, and reporting, which provides real-time data and data analysis and a reduced need for manual (read—“human”) intervention. Many vendors are touting proprietary tools and solutions that enable more automation, resulting in more accurate and timely information and services and lower costs.

On July 27, 2016, the Monetary Authority of Singapore (MAS) issued revised Guidelines on Outsourcing (Guidelines) that raise the standards of financial institutions’ outsourcing risk management practices. In their LawFlash (MAS Issues Revised Guidelines on Outsourcing), partner Daniel Yong and associate Caitlin Yap examine the changes introduced by these new guidelines, which apply to financial institutions incorporated in Singapore as well as their financial and non-financial branches and subsidiaries located anywhere in the world.

According to a recent Intel Security report, 60% of IT decisionmakers surveyed work at organizations that outsource at least some cybersecurity work, a trend driven partially in response to in-house cybersecurity skill shortages. Although organizations of all sizes face cybersecurity risks of increasing diversity and sophistication, 82% of respondents reported challenges in hiring enough skilled cybersecurity workers to address those risks, a challenge that is being met by outsourcing many cybersecurity functions.

According to a recent global study, integrating Internet of Things (IoT) technologies into core business processes is surging, and 76% of organizations surveyed say IoT will be “critical” to future success. According to the study, IoT adopters are integrating the technology into a broad spectrum of technologies and business processes, many of which intersect with commonly outsourced business functions, such as IT support, facilities management, and enterprise resource planning (ERP).

In a recent FTC Opinion and Final Order relating to charges of unfair trade practices against a medical testing laboratory based upon alleged data security violations, the FTC has asserted the authority to take data security enforcement action against companies under the FTC Act for their security practices regardless of whether the data security violations have caused actual financial or physical harm to particular consumers.

The FTC Act prohibits unfair methods of competition in commerce. In a significant 2015 ruling on the FTC’s authority, the US Court of Appeals for the Third Circuit upheld the general authority of the FTC to regulate cybersecurity under Section 5 (the unfairness prong) of the FTC Act. The court stated that under the amendments to the act, the FTC could deem a cybersecurity practice unfair if the practice causes or is likely to cause “substantial injury to consumers which is not reasonably avoidable by consumers themselves and not outweighed by countervailing benefits to consumers or to competition.”