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Business Process Outsourcing: Process, Strategies, and Contracts / Edition 2

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Overview

Many corporations are currently restructuring their business processes in order to become more competitive and cost effective. Once the decision has been made to outsource, a corporation must structure the deal. This book will show them how to request proposals and negotiate and close the agreement—creating the outsourcing strategy.

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Editorial Reviews

From the Publisher
"This book provides a welcome and detailed account of what BPOs are, how to measure outsourcing performance..." (Government Opportunities, July 2007) 
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Product Details

  • ISBN-13: 9780470044834
  • Publisher: Wiley
  • Publication date: 4/6/2007
  • Series: Wiley Desktop Editions Series
  • Edition description: Revised Edition
  • Edition number: 2
  • Pages: 600
  • Product dimensions: 10.00 (w) x 7.00 (h) x 1.31 (d)

Meet the Author

John K. Halvey is a partner in the New York office of the international law firm of Milbank, Tweed, Hadley, & McCloy, LLP and the founder of the Strategic Sourcing and Technology Group. He practices in all areas of technology and sourcing law, with particular emphasis on information technology and business process outsourcing and private equity transactions involving technology or sourcing companies.
Mr. Halvey has represented companies in many of the largest technology, telecommunications, and business processing outsourcing transactions, including Deutsche Bank, JP Morgan, BellSouth, Panasonic, Citigroup, DuPont, AT&T, Alcatel, Xerox, Boeing, Bombardier, General Atlantic and the Commonwealth Bank of Australia.
His work in these areas has been the subject of articles in Forbes, Information Week, Computer World, CIO Magazine, The Daily Deal, and Venture Capital Journal. Mr. Halvey has for many years been ranked by Chambers and Partners as one of the world’s leading information technology and outsourcing lawyers and was the only lawyer in the United States to be ranked a "Star Performer" in the outsourcing industry in both 2005 and 2006. In 2006 Mr. Halvey received the Chambers Shield of Excellence as the Outsourcing Attorney of the Year and as the HR Outsourcing Attorney of the Year by the HROA.
In 1995 Crain’s named Mr. Halvey on its list of the 40 most successful people under 40 in New York City. He is the coauthor of Information Technology Outsourcing Transactions: Process, Strategies, and Contracts (John Wiley & Sons, 2005).

Barbara M. Melby is a partner in the Global Outsourcing Group at Morgan, Lewis & Bockius, LLP. Ms. Melby’s practice focuses primarily on outsourcing transactions, including information technology and business process outsourcing, as well as other technology-related transactions, including development agreements, system implementation agreements, licensing and hosting agreements, technology services, joint ventures, and strategic alliances.
One of the leading outsourcing attorneys in the United States, Ms. Melby is the coauthor of Information Technology Outsourcing: Process, Strategies, and Contracts (John Wiley & Sons, 2005). She was recently recognized by Chambers USA as one of the nation’s leading lawyers for Business Process Outsourcing.
In addition to her two books, she has written numerous articles in and has been widely quoted in a wide variety of publications, including CIO Magazine, IT World, The Metropolitan Corporate Counsel, and The Pennsylvania Lawyer. Ms. Melby is also a frequent speaker on outsourcing and technology transactions at various business, legal, and professional conferences.

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Read an Excerpt

CHAPTER 1

OVERVIEW

1.1 THE EMERGING MARKET

Business process outsourcing (BPO)-- the management of one or more specific business processes or functions (e. g., procurement, accounting, human resources, asset or property management) by a third party, together with the information technology (IT) that supports the process or function--is being heralded in the marketplace as the next generation of outsourcing. As IT outsourcing services become more "commoditized," customers and vendors alike are looking to BPO as a means to revitalize their organizations, reduce costs, or both. According to a recent study sponsored by PricewaterhouseCoopers, 46 percent of the individuals surveyed said that during the last three years the importance of BPO has increased at their organizations. For the customer, the outsourcing of business processes would allow the customer to focus on its core competencies, while having a qualified third party focus on and add value to noncore processes. For the typical vendor, BPO, a natural extension of IT outsourcing, offers a possible means to expand its primary service offering, with the opportunity to introduce innovative service and pricing structures (and realize higher pricing margins) in a relatively untapped market.

G2R, a leading outsourcing and information services research firm, has noted that while IT costs equal 1 to 3 percent of revenues in most companies, a process like procurement management can cost companies 7 to 11 percent alone. Therefore, the potential revenue that can be generated from outsourcing business processes (of which procurement management is just an example) is significantly greater than that generated by more traditional forms of outsourcing. Analysts are looking at the potential revenue to be generated from BPO transactions and are making astounding growth predictions for the BPO market in the next few years. If the predictions prove to be correct, the BPO market will dwarf the IT outsourcing market in the United States and abroad by the year 2000. Examples of some of the bold expectations for the BPO market include:

  • G2R estimates that by the year 2000, BPO will be a $282 billion industry, up from $138 billion in 1996, becoming 10 times the size for managing technology. The worldwide demand for finance and accounting services alone will swell from $37 billion in 1998 to $89 billion in 2003.
  • The worldwide growth rate for BPO from 1996 to 2001 is expected to be 30 percent. The U. S. growth rate is expected to be 36 percent for the same time period.
  • The Yankee Group, another research firm, has noted that BPO will be a multiple of the worldwide outsourcing potential ($ 267 billion) by the year 2000.
  • Other analysts have placed the growth rate of the BPO market at 23 percent and 26 percent over the next five years. Much of the growth is expected to be in non-U. S. markets.

While BPO is emerging as a market in and of itself, it has also become more common for IT outsourcing vendors to market business process services, such as business process management and business process reengineering, as part of a comprehensive IT outsourcing deal. It is likely, therefore, that a large number of IT outsourcing deals will include some level of business process management in the next few years. As a result, the conventional IT vendor is being forced to realign its organizational structure, marketing strategies, and resource capabilities to account for the market's interest in business process and IT outsourcing services. While the BPO market is expected to experience significant growth in the next three to five years, the concept of outsourcing some business processes is not new to most companies. The Global Top Decision Makers Study SM indicated that 63 percent of decision makers surveyed (out of a pool of 304 companies in 14 countries) said that their companies have already outsourced one or more business processes worldwide to external service providers. A survey conducted by the American Management Association revealed that 75 percent of respondents outsource one or more human resources activities. BPO, in many ways, dovetails with the growing idea of the "virtual" company, where the company offers limited core services and receives all non-core services from a third party, thereby reducing headcount and overhead. Although the concept of BPO is not new, the expected increase in the scope of the processes outsourced (e. g., a company may outsource only part of its benefits management today, leaving open the possibility of broadening the scope of its human resource outsourcing) and the various types of processes outsourced is new.

1.2 WHAT IS BPO?

As discussed earlier, BPO is becoming, if it has not already become, the hot topic in the outsourcing industry, receiving a good deal of attention in the press as well as outsourcing and industry-specific seminars. But what is covered by the term BPO?

The typical IT outsourcing deal focuses mainly on the IT component of business operations, such as data center and desktop operations. The outsourcing of a customer's data center, for example, provides back-office support to a number of business functions thereby providing a service that is shared by several, often unrelated, business functions. Rather than providing IT support to multiple functions, BPO refers to the outsourcing of one or more specific business processes or functions to a third-party vendor, together with the IT that supports it. BPO focuses on how an overall process or function is run-- from manager to end-user-- rather than on the technology that supports such process or function. IT is only a component of the overall business process. A formal definition of BPO is set out in The End-User Executive's Guide to BPO, which defines BPO as "the delegation of one or more IT-intensive business processes to an external provider who, in turn, administrates and manages the selected processes based upon defined and measurable performance metrics."

One of the challenges of discussing BPO is that it refers to the outsourcing of any "business process," which covers a wide spectrum of possibilities, from procurement to accounting to human resources to asset and property management. In the next section, we will try to place some parameters around the general categories of business processes that companies have focused on as potential targets for outsourcing.

1.3 AREAS TARGETED FOR BPO

(a) General Categories Business processes that have come under close examination as potential candidates for outsourcing typically fall within one of the following six categories:

  1. Administration (audit, tax)
  2. Asset and property management
  3. Finance (accounting, billing, accounts payable, accounts receivable)
  4. Human resources (benefits administration, payroll)
  5. Miscellaneous (energy services, customer service, mailroom, food processing)
  6. Procurement/logistics

These categories have been established to facilitate the discussion of the general types of business processes that are the subject of consideration for outsourcing. Since in many cases a business process touches different areas within an organization, customers and vendors may categorize certain business processes under different headings depending on the organization's internal structure. For example, in some companies, payroll is considered a human resource function, while in others it is considered a finance function. Similarly, tax compliance may be considered an administrative function in some companies and a finance function in others.

As the BPO market evolves, customers and vendors will undoubtedly identify more business processes that can-- and will-- be outsourced. The potential reach of BPO is evidenced by the scope of what is even now being considered for outsourcing. Business processes targeted for outsourcing are expanding beyond the traditional corporate support functions into the supply chain. For example, an increasing number of companies are considering outsourcing their customer service functions. The voice behind that toll-free customer service number may not be an employee of the manufacturer but an employee of a third-party outsourcing vendor.

(b) Administration Since business processes that fall within the administration category are generally not considered core to a company's operations, more companies are examining processes such as tax compliance and internal auditing to assess whether they should be outsourced. Tax compliance has been the subject of outsourcing for longer than most other business processes. Companies have historically outsourced some or all of their tax compliance function to outside accounting firms. Since tax, in many ways like the practice of law, requires being constantly apprised of the laws, regulations, and rules in multiple jurisdictions, many companies have found it more efficient to rely on outside firms to effectively manage this process.

However, there are some administrative functions that companies are just beginning to consider for outsourcing. One example is internal auditing. Many companies have considered this function as one that should remain internal since it often involves looking closely at many of the company's sensitive operations. A potential problem is a possible conflict with the external audit function. However, with the negotiation of strict confidentiality provisions, companies are beginning to allow outside firms to manage this process.

(c) Asset and Property Management An area that financial institutions, particularly investment companies, are considering for outsourcing is asset management. If, for example, an investment company manages a small amount of certain assets as part of a larger service offering or to be able to market itself as a full-service company, it may consider out-sourcing the underlying business process to a more experienced company with larger portfolios of these types of assets and greater infrastructure and resources to manage such assets. An issue that arises with asset management outsourcing is the extent, if any, permission from or notice to the outsourcing customer's clients is necessary. Such an approval or notice requirement may dissuade certain financial institutions and investment companies from outsourcing for fear that clients may find it more cost effective to do business directly with the outsourcing vendor.

While asset management outsourcing has just begun to gain attention, property or real estate management operations have been the subject of outsourcing for some time. The management of property or real estate typically involves responsibility for such noncore functions as physical security, maintenance, customer service, cafeteria, parking, leasing, rent collection, and disaster recovery. Since in many cases the owner of real estate purchases property for investment purposes, the owner is often eager to turn over management responsibility to a third party.

(d) Finance Most of the big accounting firms and their consulting counterparts, such as PricewaterhouseCoopers, Arthur Andersen, Ernst & Young, Deloitte and Touche, and KPMG, offer outsourcing services that provide support for a company's financial functions. These functions may include:

  • General accounting
  • Payroll
  • Treasury/ cash management
  • Accounts payable
  • Accounts receivable
  • Credit
  • Fixed assets
  • Contract maintenance
  • Collections
  • Financial systems
  • Tax compliance
  • Budgeting
  • SEC reporting

One survey revealed that only 12 percent of the respondents indicated that their organizations outsource "finance/ accounting," while another survey indicated that 38 percent of the respondents indicated that their organizations outsource some or all of the finance function. Dun & Bradstreet Receivable Management Services saw a 60 percent increase in outsourcing contracts in 1998, with its outsourcing portfolio increasing from $200 million in 1995 to $5 billion in 1998.

Companies that do outsource all or part of their finance function often want to turn over managerial and operational responsibility of a finance function in conjunction with the reengineering of their financial methodologies and systems. Such reengineering may involve the development and implementation of new methodologies and/ or systems or customization of off-the-shelf or standard third-party methodologies and/ or systems (e. g., a SAP implementation). Outsourcing transactions that include business process reengineering and BPO are more complex, often involving multiple documents and requiring the parties to address issues such as cross-termination and cross-default.

(e) Human Resources What is covered by human resources varies from company to company. For example, some companies consider payroll to be a human resource function, while others consider it a finance function. For the purposes of this discussion, the human resources category covers all employee-related functions, from recruitment to benefits management, claims administration, and payroll.

While some companies opt to outsource the entire human resource process to one vendor, it is more common to identify particular functions within the human resource process for outsourcing to different vendors, largely because different vendors have different expertise within this area. For example, if a company wanted to outsource payroll, it might consider a vendor with accounting expertise, while if it wanted to outsource benefits management, it might consider a vendor with more ERISA and insurance expertise. This outsourcing to multiple vendors may change as vendors develop-- or more likely obtain through merger, acquisition, or strategic alliance/ partnership-- the expertise to become full-service human resource outsourcers.

A relatively new phenomenon is the offering of low-cost human resource services by Web-based outsourcers. The target of such outsourcers are generally smaller and start-up organizations that are typically not candidates for traditional outsourcing due to the size and scale of their service needs. Allegiance Telecom Inc., for example, disseminates human resource policies and benefits to its rapidly growing workforce via a password-protected Web site created by Online Benefits Inc. Another Web-based outsourcer, Atlantic Media of Boston, creates online company directories for smaller organizations that are accessible to employees via the Internet. The directories may include such information as biographies, resumes, and skill listings.

According to a number of surveys, human resources functions are among the most common business functions outsourced. The Global Top Decisions Makers Survey SM revealed that 37 percent of the respondents outsourced payroll, 33 percent of the respondents outsourced benefits management, and 24 percent of the respondents outsourced claims administration. According to the End User's Executive's Guide to BPO, 54 percent of the respondents outsourced payroll and 54 percent outsourced benefits administration. A 1997 study by Murray Hill, Dun & Bradstreet Corp., and The Outsourcing Institute revealed that human resource activities comprised as high as 12 percent of the outsourcing market in North America. According to Aon Consulting's 1997 Survey of Human Resource Trends, nearly 50 percent of respondents outsourced more human resource functions than they did three years before and more than 50 percent intended to outsource more functions during the following three years.

Customers (and vendors) considering an arrangement that involves the outsourcing of one or more human resources functions will need to consult representatives from a variety of disciplines. Such disciplines typically include, at a minimum:

  • Legal
  • Audit
  • Personnel
  • ERISA
  • Tax

(f) Miscellaneous In addition to the general business process categories discussed in this section, there are a number of other, less easily categorized, processes that companies are beginning to consider for outsourcing. Such business processes include energy services, customer service, mail and copying services, and food services (which, in some cases, may fall under the category of property management). The spectrum of business processes that are the subject of outsourcing will likely grow as companies identify noncore areas that may be effectively managed by a third party or, if outsourced, will lead to a reduction in costs.

Examples of transactions that involve the outsourcing of business processes that fall under the miscellaneous category include:

  • A transaction between Duke Solutions and Kraft for energy services at 70 facilities in North America
  • A transaction between Strategic Resources Solutions and Wachovia Bank of Winston-Salem to manage energy use at 708 sites
  • A transaction between Flower Industries and Service Master for food processing ° A transaction between Merrill Lynch (UK) and Pitney Bowes Management Services for the outsourcing of interoffice mail
  • A transaction between United HealthCare and Corporate Transfer Service, Inc. and PHH Relocation for the outsourcing of employee relocation services
(g) Procurement/ Logistics An area that is receiving significant attention, particularly in the vendor community, is procurement outsourcing. Procurement outsourcing covers some or all aspects of noncore purchasing and supplies management, including:
  • Product selection
  • Acquisition
  • Delivery
  • Inventory
  • Packing
  • Warehouse management
  • Installation
  • Moves, adds, and changes
  • Refreshes
  • Maintenance
  • Help desk services

The types of goods and services that may be included in the procurement outsourcing arrangement depend largely on which goods and services the customer considers non-production goods and services. In some instances, the customer focuses the outsourcing on specific goods and services, such as office supplies or office equipment. In the typical procurement outsourcing transaction, the customer is typically looking to the vendor to standardize supply options and offer cost savings based on efficiency and economics of scale.

A business process that often overlaps with procurement is logistics. In addition to a number of midsize and smaller companies that focus primarily on logistics outsourcing, several of the large transportation and shipping companies, such as Ryder, Federal Express, and UPS, are offering logistics outsourcing services. Examples of recent logistics outsourcing deals include:

  • An arrangement between Dow Chemical and Menlo Logistics for the outsourcing of inbound/ outbound packaged goods transportation
  • An arrangement between Ford Motor Company and Ryder Logistics for the design and management of a supply chain and transportation system
  • An arrangement between Telstra Corp. and TNT Australia for management of warehousing and transportation functions

Since procurement and logistics outsourcing typically involves the acquisition, handling, and/ or transportation of goods, a number of legal and regulatory issues specific to such services may arise, such as warehouse liens, security interests, insurance, and allocation of risk during transportation. As with any BPO transaction, the customer and the vendor should consult legal and other counsel, as appropriate, to flesh out all of the applicable legal and regulatory issues and assist in identifying the risks and benefits of the transaction.

1.4 REASONS FOR OUTSOURCING BUSINESS PROCESSES

Vendors are marketing BPO as an alternative to the typical IT outsourcing deal, encouraging customers to identify noncore processes that are inefficient, too costly, or difficult to manage. The entire process (except, in most cases, a high-level management position or positions) is then turned over to the vendor, who, in turn, agrees to productivity, customer satisfaction, and cost savings commitments.

As the IT outsourcing marketplace becomes more commodity based (e. g., number of CPUs provided, help desk calls answered), BPO customers are looking for innovative ways to increase the efficiency and quality of an entire business process through value-added services, customer satisfaction and, ideally, a direct, quantifiable impact on share price and profit. Since BPO focuses on an entire process rather than part of the process as with IT outsourcing, it is in many ways easier to identify the benefits derived from the BPO relationship. Some of the key business drivers for customers considering BPO include:

  • Transferring the entire function (not just the IT component) out-of-house
  • Enhancing/ improving methodologies
  • Benefiting from industry knowledge or experience
  • Streamlining or standardizing processes across its organization
  • Sharing resources or technologies
  • Committing less upfront investment to new methodologies or technologies
  • Obtaining flexibility with respect to the roll-out of methodologies or technologies
  • Increasing productivity
  • Quantifying savings or benefits more easily
  • Tracking customer satisfaction
  • Enhancing shareholder value

Obviously, a customer's objectives for outsourcing one or more business processes will vary on a deal-to-deal basis. The objectives are typically shaped by management's overarching goal in outsourcing (e. g., transition to new methodology or technology, reduction in costs or expenses).

1.5 INTEGRATION: MAKING BPO FIT

As customers are beginning to outsource one or more business processes, a number of issues are emerging with respect to the integration of the services and systems being provided by the BPO vendor with the services and systems used in connection with other business processes being provided internally or by a third party. Some of these "integration" issues are:

Systems integration. As part of the BPO transaction, the BPO vendor often introduces new, state-of-the-art systems that are specific to the business process being outsourced. The customer will need to consider how these systems will interrelate with the systems being used in connection with other business process. How will BPO impact the customer's move toward standardization?

Existing IT outsourcing arrangements. What impact will the BPO transaction have on existing outsourcing, particularly IT outsourcing, arrangements? Will there be a reduction or termination of services under existing outsourcing contracts? How do the customer's other outsourcing contracts deal with such reduction or termination? Vendor management. How will responsibility be allocated among the outsourcing vendors if there is a service failure? How will the various outsourcing vendors be managed?

1.6 BPO VENDORS

When identifying vendors to provide BPO services, the customer's spectrum of possible vendors will depend on the particular process under consideration as well as the scope of the outsourcing. The vendor pool for payroll administration will in most cases be different than the vendor pool for procurement outsourcing. Similarly, the customer will probably consider different vendors if it wishes to simply have the vendor continue the operation of existing process service rather than a more complex outsourcing that requires the development, implementation, and management of new methodologies and/ or technologies. Another factor to consider when selecting possible vendors is the geographic scope of the outsourcing. For multinational transactions or transactions in foreign countries, the customer should identify vendors with resources in the particular locations that are under consideration for outsourcing.

Many of the leading vendors in the BPO industry have capabilities and experience in process-related services (e. g., business process reengineering, management consulting, change management, consulting), as well as technology services. Often, the BPO transac-tion is preceded by or entered into in conjunction with a reengineering project. In addition to the conventional IT outsourcers, several of the top accounting firms-- those with both process and technology capabilities-- are leading the BPO market. To be able to provide the full scale of services that the BPO customer desires, many vendors are looking outside their own organizations to other companies with established service experience. The vendor who seeks to be a full-service BPO outsourcer may acquire the resources and experience offered by such an outside company through an outright acquisition or some type of teaming or "strategic alliance" relationship. For example, Affiliated Computer Services acquired Document Acquisition Services to enhance its data capture, imaging, and retrieval capabilities; Coventry Industries Corp. acquired BSD Healthcare Industries Inc. and People First LLC to expand the types of human resource outsourcing services that it offers; and Aspect Computing, Citibank Global Customer Solutions, and Manpower Services Australia formed a joint venture to offer a wide range of financial outsourcing services.

Another growing trend among BPO vendors is to team or form an alliance with a software provider with a product designed to serve particular business processes. For example, Arthur Andersen has teamed with J. D. Edwards to offer financial services, and PeopleSoft has created a Certified Outsourcing Partner Program, which includes Computer Sciences Corporation (CSC) and KPMG as members, to break into the human resources outsourcing market.

A relatively new but growing market is being forged by Web-based outsourcers that offer specialized services via the Internet. Such outsourcers are offering a wide range of low-cost services primarily to smaller and start-up organizations. Such services include document storage, payroll administration, data backup, and benefits management.

Exhibit 1.1 provides a list of a number of BPO vendors. (Please note that for the purposes of Exhibit 1.1, we have used the process categories identified in Section 1.3.)

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Table of Contents

ABOUT THE WEB SITE.

ABOUT THE AUTHORS.

PREFACE.

CHAPTER 1: OVERVIEW.

1.1 The Emerging Market.

1.2 What Is BPO?

1.3 BPO Categories.

1.4 Reasons for Outsourcing Business Processes.

1.5 Integration: Making BPO Fit.

1.6 BPO Vendors.

CHAPTER 2: PLANNING STAGE.

2.1 Outsourcing as an Option.

2.2 Defining the Scope of the Transaction.

2.3 Selecting a Group of Potential Vendors.

2.4 Request for Proposal.

Appendix 2.1 Nondisclosure Agreement.

Appendix 2.2 Questionnaire for Assessing Legal Resources Required.

Appendix 2.3 Questionnaire for Assessing Legal Resources Required (Vendor Form).

Appendix 2.4 Request for Information.

Appendix 2.5 Request for Proposal.

CHAPTER 3: SELECTING THE VENDOR.

3.1 Evaluating the Proposals.

3.2 Notifying the Preferred Vendor(s).

Appendix 3.1 Evaluation of Vendor Proposals Relating to the Provision of BPO Services.

Appendix 3.2 Letter of Intent (Customer Form).

Appendix 3.3 Letter of Intent (Vendor Form).

CHAPTER 4: NEGOTIATIONS: STRATEGY AND PROCESS.

4.1 Forging the Legal Relationship.

4.2 Negotiating Process.

4.3 Exposure Analysis.

4.4 People Negotiate, Not Companies.

4.5 Negotiating Strategy.

Appendix 4.1 Due Diligence Agreement.

Appendix 4.2 Model Term Sheet.

Appendix 4.3 Legal Due Diligence Checklist.

Appendix 4.4 Issues Arising in Connection with Implementing a Shared Services Center.

CHAPTER 5: BUSINESS PROCESS OUTSOURCING CONTRACT.

5.1 Overview.

5.2 Use of Attorneys.

5.3 Key Contract Issues.

5.4 Regaining Strategic Control.

5.5 Pricing Considerations.

5.6 Assembling the Team.

Appendix 5.1 Checklist: Key Issues in BPO Agreements (General).

Appendix 5.2 Checklist: Key Issues in HRO Agreements.

Appendix 5.3 Checklist: Key Issues in F&A Outsourcing Agreements.

Appendix 5.4 Checklist: Key Issues in Procurement Outsourcing Agreements.

Appendix 5.5 Checklist: Key Issues in Logistics and Warehouse Management Outsourcing Agreements.

Appendix 5.6 Business Process Outsourcing Agreement (Customer Form).

Appendix 5.7 Business Process Outsourcing Agreement (Vendor Form).

Appendix 5.7A A Proprietary Rights Rider (Vendor Form).

Appendix 5.8 COLA Checklist.

Appendix 5.9 Joint Management Procedures.

CHAPTER 6: MEASURING PERFORMANCE.

6.1 Overview.

6.2 Service Levels.

6.3 Benchmarking.

Appendix 6.1 Customer Satisfaction Survey Checklist.

Appendix 6.2 List of Reports.

CHAPTER 7: HUMAN RESOURCES.

7.1 Transitioning Employees to the Vendor.

7.2 Due Diligence.

7.3 Terms and Conditions of Employment.

7.4 Transitioning Employees from Customer to Vendor.

7.5 Human Resources Representatives.

7.6 Contract-Related Issues.

Appendix 7.1 Stay Incentives.

Appendix 7.2 Human Resources Sample Language for the Request for Proposal.

Appendix 7.3 Human Resources: Sample Terms and Conditions for Employee Transition in the United States.

Appendix 7.4 Employee Confidentiality Agreement.

CHAPTER 8: TRANSFORMATIONAL OUTSOURCING.

8.1 Moving from A to C.

8.2 Internal Considerations.

8.3 Project Definition.

8.4 Maintaining Multiple Environments.

8.5 Using Subcontractors.

8.6 Key Contract Provisions.

CHAPTER 9: INTERNATIONAL CONSIDERATIONS.

9.1 International Transactions.

9.2 Contract and Legal Issues.

Appendix 9.1 Checklist: Key Issues in Global BPO Transactions.

Appendix 9.2 Offshore Checklist.

Appendix 9.3 Local Counsel Questionnaire.

CHAPTER 10: INFORMATION PRIVACY AND SECURITY ISSUES.

10.1 Introduction.

10.2 Selected Information Privacy Laws.

10.3 Selected Information Security Laws.

10.4 Company Privacy Policies.

10.5 Global Issues.

10.6 Offshore Outsourcing.

10.7 Practice Tips.

Appendix 10.1 Data Privacy Questionnaire for Proposed Outsourcing Transaction.

CHAPTER 11: EXHIBITS AND ANCILLARY AGREEMENTS.

11.1 A Critical Part of the BPO Contract.

11.2 Exhibit Listings.

11.3 Checklists for the Exhibits.

11.4 Ancillary Agreements.

Appendix 11.1 General Assignment and Bill of Sale.

Appendix 11.2 Teaming Agreement.

Appendix 11.3 Legal Checklist for ASPs.

Appendix 11.4 Legal Due Diligence Checklist for Companies Transacting with ASPs.

Appendix 11.5 Business Continuity Issues for Customers to Consider When Evaluating an Application Service Provider.

CHAPTER 12: POSTNEGOTIATION ACTIVITIES.

12.1 Contract Signing.

12.2 Press Release.

12.3 Autopsy.

12.4 Risk Analysis.

12.5 Contract Administration.

12.6 Implementing the Transition Plan.

12.7 Notifying Third Parties.

Appendix 12.1 Consent Letter.

Appendix 12.2 Consent Letter (Access/Installation).

CHAPTER 13: RENEGOTIATION AND TERMINATION.

13.1 Overview.

13.2 Renegotiation/Termination Process.

13.3 What Does the Contract Say?

13.4 Additional Issues to Consider.

13.5 Termination Plan.

Appendix 13.1 Customer Checklist for Renegotiating/ Terminating BPO Transactions.

Appendix 13.2 Due Diligence Checklist for Customers Considering Termination.

Appendix 13.3 Termination Agreement.

Appendix 13.4 Outline of a Termination Assistance Services Agreement.

INDEX.

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