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There is no agreement about exactly what is meant by outsourcing but the view most generally held is that it is the outsourcing of a business function by a commercial entity or public body most usually where the function was previously undertake in-house. The aim is to ensure that the commercial entity or public body extracts added value and efficiency using third party expertise. It is a commercial decision that can enable you to both assist your customers and provide better services to them. However, it brings with it its own challenges and we provide advice on all forms of outsourcing contracts for both the entity that is outsourcing(client) as well as the recipient service provider.
The success of outsourcing depends on putting in place a flexible but clearly defined arrangement which correctly reflects the client’s requirements and which provides a mechanism by which the parties can respond to changing needs. For outsourcing to work a suitable contractual structure needs to be implemented and the outsourcing or transfer contract needs to identify the requirements of the client, contain a full description of the outsourced services, the level of service required and how such services are priced. This includes working with your human resources department to ensure that the transfer of employees and the risks associated with such transfer are dealt with in accordance with the commercial deal and common practice. In cases where assets are also transferred we advise on contractual, structural and taxation implications.
For further information please contact Jonathan Ebsworth,
Gareth Hall or Andrew Crawford.
