Many companies and governmental organizations are choosing to outsource the administration of their Information Technology (IT) departments. When it comes to the process manufacturing software system piece of a manufacturing company’s infrastructure, procurement and purchasing personnel have to be completely head’s up to additional considerations in making these purchases and administering agreements.

Manufacturing Software

Process Manufacturing Software in an Outsourced Administrative Environment

As this practice increases in popularity, procurement of software and hardware often falls to the outsourcer, as well. At least one additional layer is added to the IT administration onion; procurement of hardware, software, including process manufacturing software and maintenance by third party administrator.
Some considerations:
1.    Software and hardware licensing provisions that prohibit the outsourcer from making such purchases on their client’s behalf.
2.    Outsourcers sometimes offer to “carry” their clients on their own system.
3.    Maintenance and security certificate administration can be tied to hardware ownership and original purchase.
4.    The outsourcer must be a formally designated agent for the client in order to make such purchases and adjustments.
5.    Pre-existing agreement renewal schedules.

Process manufacturing software licensing issues are often affected by a number of factors. Being intimately familiar with the terms of existing agreements and budgeting for stopgap measures to prevent production halts is critical. The five items listed above can affect the client and the outsourcer in the following ways.
1.    Some software and hardware providers do not allow for the third party procurement of their products on behalf of their client and can be negotiated out of a license or maintenance agreement, but not always.  The end result is that warranty and maintenance terms can be voided, on the process manufacturing software system or other software package.

2.    Compliance issues can also arise out of creative licensing solutions.  On occasion, the outsourcer may offer to “carry” the client on it’s own licensing and maintenance agreements.  Buyers beware: few, if any, software companies find this acceptable.

3.    Maintenance and security certificates used on an Internet site may have originally been purchased directly by the client.  Administration of these contracts and certificates may be designated to a particular individual in the company and while certificates may be moved around between servers, doing so will be difficult if originally purchased by the client company and often results in having to re-purchase the certificates and re-write agreements.

4.    Some software and hardware maintenance providers require that the outsourcer become a formally designated agent for the client in order to purchase software and/or enter into maintenance or software agreements on a client’s behalf.  This often involves

5.    Information transparency is vital to ensure smooth operations from transition, throughout the outsourcing relationship.  Obtaining and maintaining the viability of agreements will minimize avoidable downtime by avoiding expirations and establishing bridge agreements where ever necessary.

Despite all the risks associated with outsourcing for the provider and for the client, it remains cost effective alternative strategy for infrastructure administration. Attention to detail is vital to the success of outsourcing as an administrative model and presents minimal risk to both the client and the outsourcer.

Written by :

alr857