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Cheap Off-Shore Web Design is Risky Business

Telephone conversations can be revealing. A recent discussion came around to an Australian professional consultancy and their choice to contract work out to a perceived cheaper option – a Bulgarian web design firm. It’s a strong business temptation in the hyper-networked world.

But before they went down that route I’d have offered some food for thought.

Some Contracts may resemble Toilet Paper

The first point to clarify is the country the contracts apply to… where they were signed… the jurisdiction of any legal resolution – where you have to appear in court if the contract comes to a dispute. There are three major legal systems and they don’t treat contracts equally – Common Law (the British System), Civil Law (the European System) and Islamic Law. Each individual country also has it’s own business context including political risk and economic profile. And specific countries offer unique challenges to doing business that should be considered.

If the contract is Bulgarian then you might have to hire lawyers and attend hearings on specified dates in Eastern European Civil Courts.

On the other hand, if this is an Australian contract, then how do you force the Bulgarian web design firm to appear on a given date in the appropriate court in Sydney? And how do you force them to adhere to the Australian court’s judgement? If you were awarded AUD$20,000 damages then how would you enforce that fine in Bulgaria? Or African or Middle Eastern countries? Or the United States where you might be sued on that contract, have to fly to appear with US lawyers and fight an extended and expensive legal battle with huge monetary consequences if you lose.

Were you to have a legal contract with an Indian firm… any court would take between 10 and 20 years to hear the case due to stress on the Indian legal system. You may never see a resolution.

The bottom line is that a contract you can’t enforce or that has you at such a disadvantage is worse than toilet paper to your business. It might lead to your being sued in a foreign country under a different legal system and possibly in another language.

Client Privacy and Security Concerns in a Wire Canoe

The next consideration has to be privacy and security. Were you to send client data (ie. access to database content or client files) to another country then THAT COUNTRY determines the appropriate privacy laws and enforcement. This was true when Telstra sent all of our Australian accounts offshore to Indian call centres exposing their customer base to increased identity theft. If the Bulgarian web firm stole and misused this customer data then it could kill your business.

At the same time the entire infrastructure of the online business is exposed to an overseas business entity that, let’s be honest, you really don’t know anything about. What are their business motivations and relationships? Have they used black hat search engine optimisation techniques? Did they insert malicious code? Are your website visitors going to be installing malware under your name? These cheaper Bulgarian web designers are being provided access to your passwords, file structure, email accounts and sensitive information.

If that isn’t bad enough – what are the consequences if they betray your trust? You could go out of business. You may have no financial capacity to recoup the loss or pay for the damages out of your own pocket. Just as any 60 year old pervert can say they are a 12 year old girl in an Internet chat room… anybody can tell you they run a web design business in Bulgaria.

A Dollar Spent Elsewhere doesn’t turn the Merry-go-round

Believe me, I’ve got an MBA and understand the ideals of globalisation and free trade as much as the next guy. But the reality is that by chasing the budget option off-shore there are hundreds or a few thousand dollars no longer circulating in your local community. That’s a bigger deal than it sounds.

When you spend dollars at the local grocer to buy milk then the grocer can buy shoes for his child and the dairy farmer can buy the newspaper. In turn the shoe seller and the newspaper seller receive their portions of that dollar and can buy goods they need or want for their families. Money isn’t a one-time transaction, it continually renews itself through a community increasing the social value of it’s footprint. Not investing in local talent is shooting your community in the foot – less money attracted for business investment, less money for schools and infrastructure, less money for the merry-go-round of opportunity for your own children.

Because what looks like a good deal – getting somebody to work at $5 per hour – is at the heart of it exploitative anyway. It’s no different than a large company moving production to India to avoid labour laws or safety regulations.

I’m not saying never to outsource overseas… but do it for the right reasons and be prepared to pay the appropriate value for their work. Make that decision with an understanding of the inherent business risk that comes with the decision.

There’s a saying in business – “There’s no such thing as a free lunch.” Whatever decision you make about your web design services be prepared to grab your wallet.

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About the Author

Steven Clark Steven Clark - the stand up guy on this site

My name is Steven Clark (aka nortypig) and I live in Southern Tasmania. I have an MBA (Specialisation) and a Bachelor of Computing from the University of Tasmania. I'm a photographer making pictures with film. A web developer for money. A business consultant for fun. A journalist on paper. Dreams of owning the World. Idea champion. Paradox. Life partner to Megan.

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