The outsourcing industry should develop a voluntary crisis fund to give protection to customers should their services provider hit the wall. This was proposed by IDC in light of 2e2's recent high profile collapse that left some customers scrambling for alternative suppliers, and highlighted the pitfalls of outsourcing. One …
The old saying about free lunch ..
Yeah, add a layer of complexity (and cost) by providing an escrow service. By the time you've finished ... guess what - it's no cheaper to outsource.
What about international customers?
While a move in a good direction, it would require massive standardization effort, especially complicated for SaaS vendors. Not mentioning the problem of international customers - would they be eligible? If it is for instance UK only industry we are talking about?
I fear everyone would support this idea, but only as long as they don't have to compromise and agree within industry, which is based, it seems, on lock-on principle...
Why should this be necessary?
I have seen lots of outsourcing contracts over the last few years and the majority of them have terms in them, provided by the lawyers, that give the customer step in rights or the right to terminate, if the supplier's investment rating falls below a certain level/ Other contracts demand financial guarantees from parent companies or other financial stakeholders and especcially for public sector contracts, open book accounting. So the customer already has the tools to prevent being caught out by these types of events.
Mind you there is the other side of the equation which is customers let their lawyers demand that these thing and then fail to actually exercise their rights or even review the information provided by the supplier. Even on open book accounts where the information has been provided, the customer never really bother to look at them.
There is no need for a fund what is needed is for customers to actually start to meet their obligations under contracts and manage their suppliers instead of ignoring them and only whinging when they can't get to Facebook or Amazon or their e-mail has stopped working so they don't get the links to the latest cute kitten video.
Re: Why should this be necessary?
And what happens when they go bust and their hosting company turns the power off, the landlord wont let you in to access your servers and the company they leased the hardware from retrieves it and sells the drives containing your data on ebay?
It's a non-starter...
This put simply, is a crazy idea......