What are IT Outsourcing agreements?
An IT outsourcing agreement is a contract between a business and an external IT services provider. It sets out the terms for the provider to supply and manage some or all of the business’s IT systems and services.
Benefits of IT Outsourcing
Outsourcing IT can provide many advantages for a business:
- Cost savings – Specialist providers can run IT more efficiently.
- Access to expertise – Gain skills and technology not available in-house.
- Flexibility – Services can be scaled up and down.
- Focus – Allows a business to concentrate on its core activities.
- Risk transfer – Shifts responsibilities like security and upgrades.
Key Elements of an IT Outsourcing Agreement
A good IT outsourcing agreement will clearly set out:
- Scope of services – Detailed description of what is being outsourced.
- Service levels – Performance standards and remedies for breaches.
- Pricing – Clear fees and invoicing arrangements.
- Term and termination – Notice periods and exit management.
- Liability and indemnities – Limitations and protections.
- IP and data – Ownership and confidentiality.
- Dispute resolution – Escalation process.
What is typically included in an IT Outsourcing agreement?
Common services that are outsourced include:
- Hardware – Such as servers, computers, phones, printers etc.
- Software – Including installing and updating programs.
- Cloud services – Such as data storage and software access.
- IT support – Helpdesk, maintenance and cybersecurity services.
- Business processes – Such as payroll or data processing.
IP and privacy considerations when entering an IT outsourcing agreement
It is important to carefully consider any IP clauses when entering an IT outsourcing agreement. A specialist IT company will most likely include clauses that protect their IP and the ability to enforce that protection in the event of an infringement or breach.
There may also be clauses around privacy and confidential information for both parties. This might include restrictions around which employees in which organisations have access to certain confidential material such as trade secrets, confidential client data, sensitive financial information or protected algorithms and coding.
The inclusion of IP ownership and privacy clauses in an IT Outsourcing Agreement is critical.
Get in Touch
Getting specialist legal advice can help ensure your IT outsourcing agreement appropriately protects your business interests. Our team is here to help you if you require assistance with reviewing, drafting or interpreting IT Outsourcing Agreements. Contact us today to schedule a consultation and learn how we can assist you in ensuring you enter the most appropriate agreement for your situation that protects your business, confidential information and intellectual property.