Pomerantz - Outsourcing

1. +
Avoiding and
Resolving
Disputes in the
Outsourcing
Context
Lisa Renee Pomerantz, Attorney at Law
80 Orville Drive, Suite 100
Bohemia, NY 11716
Tel: 631-244-1482 Fax: 631-567-0611
lisa@lisapom.com
www.lisapom.com

2. +
Agenda
 What developments have led to the
outsourcing phenomenon?
 What factors contribute to the prevalence of
disputes in this context?
 What can be done to avoid and resolve
disputes in the outsourcing context?

3. +
Issue 1- The Information
Asymmetry Problem
 Nature of the problem: the vendor has more
information than the customer
 What types of information may a customer
lack?
 How can this result in conflict?
 How can such conflicts be avoided or
minimized?

4. +
Issue 2- The Relationship Will
Be a Process, Not a
Transaction
 Why is outsourcing a process, not a
transaction?
 Why can this lead to conflict?
 What kinds of conflict are likely to arise?
 What mechanisms can be implemented to
anticipate and resolve conflicts?

5. +
Issue 3-Conflicts of
Interest
 Why do conflicts of interest arise in
outsourcing arrangements?
 How can the parties address such conflicts
and align incentives?

6. +
Issue 4- Measuring
Progress
 Why is measuring progress important in
avoiding and resolving conflict?
 Why might progress be difficult to measure
in the outsourcing context?
 What dispute resolution mechanisms might
be appropriate for resolving conflicts over
performance?

7. +
Issue 5-Internal
Confusion and Dissension
 How might internal confusion or dissension
arise on either the customer or vendor side?
 What are the potential consequences of such
confusion or dissension?
 What steps can be taken to avoid confusion
or dissension?

8. +
Issue 6-Obtaining Internal
Client Cooperation
 Why might this be a challenge for both the
customer project manager and the vendor?
 How can this be addressed?

9. +
Issue 7-Inflated
Expectations
 Why might expectations be inflated in the
outsourcing context?
 How might expectations be inflated?
 What can and should be done to manage
expectations?

10. +
Issue 8-Dealing with the
Unexpected
 Why should the unexpected be expected in
outsourcing arrangements?
 What kinds of disruptions can be
anticipated?
 What conflict resolution mechanisms are
appropriate to help parties deal with forks
and bumps in the road?

11. +
Issue 9-Avoidance of
Conflict
 Why might the parties want to avoid conflict
at the contract negotiation stage?
 At the implementation stage?
 Why can conflict avoidance be problematic?
 What kinds of problematic issues are likely
to be bypassed?
 How can the parties avoid conflict
avoidance?

12. +
Issue 10-Prolonging the
Inevitable
 When outsourcing arrangements do not
work out, why are the parties reluctant to
terminate them?
 What are the consequences of delayed
termination?
 What dispute resolution mechanisms can
help the parties achieve “graceful exits”?

13. +
Conclusion
 What have you learned that will be helpful to
you in avoiding and resolving conflict in the
outsourcing context?
 Questions and comments?