This is a delicate issue and complicated one at that. With more and more core support moving out offshore there is always a need for vendor to ask for hardware and software from the clients abroad. However there are financial, legal and security issues involved. While the implementation of security protocols in India pure-play firms is very strict, you can install any software with an approval from clients. Some software provides for installs globally via master services agreement, whhile most of the software licenses do not extend beyond the shores of the country where it was legally purchased.

The challenges is with controlling the inventory as well, there are cases where the offshore vendors install hundreds of copies of software without the knowledge and implication on what this means, very few clients have good process in place to monitor SW and HW.

With HW it is even more delicate since the vendor would not support clients HW in some cases – mostly laptops. fixing routine problems, upgrades are a problem. In some cases, the clients end up asking the vendor to buy on their behalf and it ends up as “client funded, vendor owned” the ability to capitalize the purchases is lost in most cases leave alone benefit from pricing advantages if brought onsite.

Some clients treat their offshore centers as extension of their work place. however the vendor site not necessarily would fall under that category even with a MSA. (Master Services Agreement). Even the clients offices offshore will not be covered where the SW or HW is purchased in countries where the license agreements specifically call for using within the shores of the country where brought.

The fact that provisioning is needed for execution and support makes this a necessary evil. However putting together a good tracking mechanism will save clients from legal exposure, and also benefit from this measure than losing precious funds that can be put to use elsewhere. Also this cost is additional to overall outsourcing budget is important since this could end up being a significant amount.