Outsourcing some IT project is a tactic small and large companies alike have embraced in recent years. But what happens when the outsourcing company goes under?
It’s not pretty. If an outsourcing firm goes bankrupt, the business that hired it could end up in a bind.
What’s worse, it happens more than most companies think.
According to The Gartner Group, a tech research company, one-fourth (25%) of IT outsourcing companies will go out of business within the next three years.
If you do outsource, here are three ways to avoid being caught off guard by a troubled provider:
- Do your research. Make sure your company does adequate research on all potential providers before signing any outsourcing contracts.
- Look for warning signs. Keep an eye on the provider for red flags — loss of “marquee clients,” lack of new business, poor capitalization, etc.
- Have an exit strategy prepared. If you spot any problem signs, be sure your company is ready to bail out at the drop of a hat.
