Handle Contracts, SLAs With Caution

New Delhi | Updated: Jul 22 2004, 04:27am hrs
The Indian software and business process outsourcing (BPO) companies need to be extra careful while signing contracts and service level agreements (SLAs) with their overseas clients. A hurried and unscruitinised signing of a legal agreement may result in substanitial losses in business, says a Supreme Court advocate and a cyber law expert Pavan Duggal.

Mr Duggal, who has recently completed writing a book titled Laws Of Business Process Outsourcing, believes that most of the Indian BPO companies do not give due importance and attention to legal details, before signing outsourcing contracts. The book will serve as a reference to the senior business executives of Indian BPO companies as well as that of foreign companies. While the book has covered related laws of the US and Europe, it also deals with Indian laws and regulation for data protection, information security and taxation, among others, he said. The book will be formally released on Wednesday in New Delhi.

On potential legal threats for the Indian BPO sector, Mr Duggal said that a company that has signed an SLA did not get any payment for its services, as the company executives did not notice the fine print that the entire payment was linked to delivery of a very high level of service.

It could be disastrous to the image and health of the entire industry if anything goes wrong in terms of data protection and information security, said a senior official of a Delhi-based software service provider.

It is a matter of concern. While most big companies retain legal experts and professionals to take care of the legal issues in their business, the practice is not quite prevalent in small and medium size companies, said a senior official of National Association of Software and Services Companies.