DATE POSTED: 01/03/2014

It was end of October when India’s second largest software firm, Infosys Ltd., reached a $34 million settlement with the U.S. Justice Department for claims of systematic visa fraud and abuse of immigration processes that the company allegedly committed.

The visa fraud case of Infosys, whether proven or not, certainly had implications for the company. Aside from the hard hit to its reputation, Infosys faced problems with deal pursuit and renewals. But what about the customers of the IT service provider? They, too, could face reputational, financial, and legal risks.

Tech news portal CIO.com listed a five-step plan that IT outsourcing customers should execute to protect themselves. Here is what they need to do according to the article:

1. Talk to your vendor.

Clients should have a talk with Infosys about what went wrong and how similar instances can be avoided. Right now would be the best time to have discussions with all IT service providers.

2. Conduct an HR audit.

Start a full inventory of supplier resources on your accounts or ask your vendors to do so. Identify all visa statuses and expiration dates. Specifically pay attention of B-1 visa holders.

3. Review billing.

Make sure that B-1 visa holders are only onboard for meetings, contract negotiations, or short-term training. Work with providers to transition any on-site support that does not meet visa requirements of your account.

4. Monitor immigration reform.

Interact regularly with internal government relations teams to stay on top of immigration bill developments and develop contingency plans.

5. Reconsider pricing models.

According to Hansa Iyengar, a sourcing and vendor management analyst with Forrester research, “Clients are to blame to some extent as the major reason for this kind of ‘cutting corners’ by Infosys is the intense pressure on costs that comes from the clients’ side. Enterprises need to wake up to the fact that when they demand more value from the vendor, they’ll need to bear the associated costs.”

Author: Outsourcing Insider

Outsourcing Insider consists of a team of regular blog contributors who writes topic about outsourcing and its relation to other industries like social media, finance, healthcare, sales and marketing, contact centers, and data and research.