So you have a dilemma. You may well already use an outsourced or managed service environment and it all works well, but then the supplier calls and offers to start doing some extra parts of your supply chain. Moving up the value chain as the expression goes.

That’s great too, provided it’s a supplier you know and trust. Why not ask them to take on more work if you know you can trust them to deliver? But the thing that often worries clients is how they can outsource higher-end work without losing their intellectual property.

It’s a dilemma, because the boundary of the organisation is constantly shifting, but where contracts are concerned, someone needs to take a decision so services can be defined. But when are the key parts of the relationship to check on if you are going to extend a process outsourcing relationship?

• First, is to ensure you have all your IP protected anyway using tools such as trademarks or copyright. You need to have your own house in order first.
• Second, is to review the contract with your supplier. Can you ensure that you retain IP rights even if the supplier creates value and possibly even invents new processes for you?
• Third, be aware of your own limits. There is always a pragmatic limit about what can and can’t be protected, so make sure you have also considered the difference between what the law says and what you really can do in the event of a breach.
• Fourth, review all practical security measures that can be take around the relationship, hand-offs, and the delivery site so that confidential IP cannot be removed from site.
• Fifth, identify where the supplier may be working for your competition and so-called ‘Chinese walls’ need to be extremely strong.

In most cases, if you have a great supplier at one level, then they will be able to scale up to the next level. It is usually beneficial for the supplier (more business) as well as the client (more services provided by a trusted partner) so this should not be considered a dangerous strategy. In fact, it’s going to be essential for most firms to turn to trusted partners more and more, just to achieve the kind of performance expected of a twenty-first century business.

Ensuring you can work with an ecosystem of partners whilst still protecting your valuable IP is all just a part of doing business in a globally connected environment.

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