Our recent blog post, The Rise of Next-Gen Business Process Outsourcing, highlighted the importance of understanding the exciting opportunities and the challenges of next-gen business process outsourcing (BPO) in order to effectively negotiate contract provisions that maximize the benefits of next-gen BPO and minimize the risks. In this blog, we take a look at a few key issues to consider when developing and negotiating a next-gen BPO contract.
Tech & Sourcing @ Morgan Lewis
TECHNOLOGY TRANSACTIONS, OUTSOURCING, AND COMMERCIAL CONTRACTS NEWS FOR LAWYERS AND SOURCING PROFESSIONALS
The UK Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) on December 20, 2022, announced fines totaling £48.65 million ($59 million) on TSB Bank plc (TSB) for operational resiliency failures, after an IT upgrade led to customers being unable to access core banking services.
In a recent LawFlash, a team of Morgan Lewis lawyers reviewed the US Securities and Exchange Commission’s proposal for a new rule and rule amendments that, if adopted as proposed, would require registered investment advisers to meet certain requirements when outsourcing “Covered Services.” The rule includes heightened requirements for due diligence, monitoring, and reporting, including amendments to Form ADV.
In any service relationship, continuity of service provider personnel often impacts service quality. Excessive personnel turnover on an account can negatively impact day-to-day operations and the ability to respond to issues. Assignment and management of personnel are primarily business issues that are the responsibility of the service provider. However, there are important provisions that can be included in service agreements that can help address these issues.
IT service provider performance has long been measured by service level agreements (SLAs) that set quantifiable standards for many aspects of a sourcing arrangement. These standards range from how quickly customer support is provided and an incident is resolved to application uptime and availability, and beyond.
As part of our Spotlight series, we speak with Simon White, one of the most senior and experienced technology lawyers in the UK market, who has held roles including deputy counsel, Chief Privacy Officer, and GC EMEA LATAM at Cognizant, one of the largest multinational IT services companies in the world with over 300,000 personnel spanning across five continents. Prior to joining Cognizant nearly 15 years ago, Simon White was a corporate associate at Morgan Lewis.
With the COVID-19 pandemic, many industries experienced a major shift in how the personnel of key suppliers worked, with “nonessential” personnel in large part working remotely. When this shift to remote work first happened (rather abruptly for many companies), security was a critical consideration, but one that was handled in many instances outside the supplier contract, with both parties focusing on keeping business operations going with must-have data and security safeguards in place.
With a solid uptick in requests for assistance with outsourcing, cloud, and as-a-service contracts, 2022 has been busy from the get-go. ISG Index confirmed this trend across the market in its recent Q2 ISG Index Report presentation on July 13, highlighting as one of its three key takeaways that “contracting activity remains strong, with ADM, engineering and industry BPO leading the way.”
The COVID-19 pandemic introduced unprecedented challenges, requiring companies to adapt quickly to the way their personnel work, changes in their business offerings, and how they interact with their customers and suppliers. With some time to adjust to the “new normal” of the pandemic (and hopefully soon, the post-pandemic), many companies are looking ahead—with a potential economic downturn being top of mind.
The unfolding conflict in Eastern Europe is likely going to cause a wide-ranging impact to companies with business operations or personnel in the region. For technology and commercial contracting professionals, this means potential contract disputes, force majeure issues, business continuity implications, and cybersecurity concerns.