How To Survive Your Outsourcer's Downfall (InfoWorld.com)

Pace Harmon Partner Steve Martin comments on what outsourcing customers can do to protect themselves from supplier scandals. "Before Steve Martin, partner at Pace Harmon, even spoke to me about what to do, he offered a caveat. While due diligence is key, even PricewaterhouseCoopers missed the hanky-panky at Satyam, and PwC was looking inside the books, he said…First, you need to sit down with your prospective vendor at its physical location, the datacenter or the development center where the work will be done. Management should be interviewed, as should the project managers involved. Also, while you are there, look around. Make sure the vendor has a state-of-the-art infrastructure. Of course, as in the Satyam example, it wasn't the infrastructure that was faulty. Most companies will share only publicly available financial information, Martin says, but there are techniques to get behind that. For example, you should ask for the prior month's revenue statement. "You can ask for a lot more financial information than is available publicly," Martin said, meaning, I believe, that if they want your business they will have no choice but to accept your prying eyes."

InfoWorld.com