Just published: International Comparative Legal Guide – Technology Sourcing 2023

For any organisation, housing a fully-fledged IT department is no mean feat, and in this day and age with the plethora of tech options out there, outsourcing IT capabilities is an attractive solution.

IT sourcing might once have primarily been a cost-cutting method, but organisations are increasingly seeking to boost their digital capability as well as keep up with competition. Whilst the lower cost of outsourcing, compared to recruiting for an in-house IT team, may be a factor, garnering expertise from elsewhere can allow an organisation to access niche skills, knowledge and resources, and offer the opportunity to react quickly and flexibility to market and environmental changes.

?So, what is technology sourcing?

Technology sourcing is the procurement and management of specialised IT resources from a third party to support/enhance an organisation’s IT operations and capabilities.

It can involve purchasing or leasing IT services or equipment, or entering an agreement with an external party, who will fulfil a particular function. These resources could be procured from providers located onshore, nearshore or offshore.

A key element of the sourcing process is drawing up an IT sourcing strategy. An organisation should consider its business objectives, IT requirements and available budget, to ensure that it procures the most suitable services and forms a strong working partnership with the IT service provider.?

How to approach technology sourcing?

Technology sourcing requires a thoughtful approach, a clear strategy and a legal eye.

In addition to the objectives of traditional procurement, that is obtaining the best resources for the best price when needed, technology sourcing also requires a profound understanding of both technology and of industry trends. It requires the ability to look beyond immediate business needs and consider whether a potential technology partner can support the company as it adapts to the constantly changing digital environment, ensure that its IT capabilities match its long-term objectives, and enable it to react to technological advancements and the activity of its competitors. The potential for both innovation and for the development of a long-term partnership is key in procuring a technology partner.

Technology sourcing lawyers must have a broad understanding of employment law, data protection law and intellectual property law amongst other practice areas. These areas and the digital sphere itself are in a state of continual flux, and any legal professional working in technology sourcing would be well-served by a companion guide that delves into the current conversations and debates happening within this sector. ?

The International Comparative Legal Guide – Technology Sourcing 2023

Last month saw the publication of the latest edition of the International Comparative Legal Guide – Technology Sourcing, which explores key developments and common issues in technology sourcing. The Guide features two expert analysis articles and boasts a further 17 jurisdiction-focussed chapters, in which legal experts provide updates and pertinent information for their respective jurisdictions, in a question-and-answer format.

In Bird & Bird's expert analysis chapter, contributing editor Mark Leach and colleague Will Bryson consider the hot topic of AI and the potential legal issues and risks for organisations adopting AI-based systems. The chapter defines an AI-based system as "a computer system which is able to analyse data in order to take actions that maximise its chance of success at an identified goal", before discussing how AI technology is currently regulated (or not) in the UK and EU. The chapter also explores contracting for AI systems, licencing, intellectual property (IP) rights and more.

Meanwhile, Kerry Hallard of the GSA- Global Sourcing Association (GSA) uses her expert analysis chapter to discuss standardisation in modern technology sourcing. She outlines the positive growth trajectory of the technology and business services industry and its pandemic-related acceleration, noting that the global outsourcing and shared services market will reach the trillion-dollar industry size in 2023. Hallard moves on to define "modern sourcing" as sourcing that is both agile and sustainable, and discusses the GSA's launch of its standard terms for professional services (GSA Terms).

In the jurisdiction Q&A section of the Guide, contributors consider the procurement process within technology sourcing, discussing how and by whom procurement is regulated in each jurisdiction. They also look at the applicability of general contracting issues, whether or not national laws impose limits or regulations on technology-related contracts, remedies available in cases of breach of contract, and termination rights.

The jurisdiction chapters also shed light on the dispute resolution methods and procedures, data protection and employment law matters, including the question of whether and on what terms employees may be transferred for the provision of technology-related services. Furthermore, contributors consider key issues in software licensing, the regulation of cloud computing services, AI and machine learning, and blockchain.

The question of intellectual property proves an uncertain topic amongst the various jurisdictions covered in this year's edition. Whilst Canadian IP Laws do not generally recognise machines as either inventor or author, McMillan explains that such questions over ownership are currently under review. In Malaysia, this question is currently untested, though legal frameworks afford rights to the works of natural persons, whilst in Mexico, BSN Bufete Sánchez-Navarro notes that IP rights generally remain with the creator or author of a work, but that Mexico's federal copyright law (the LFDA) does not offer explicit definition of these terms in the context of algorithms developed via machine learning and without direct human involvement.

Read the full publication, here:?https://iclg.com/practice-areas/technology-sourcing-laws-and-regulations

With thanks to our 2023 edition contributors:

Bird & Bird | GSA- Global Sourcing Association | McMillan LLP | Fieldfisher | KYRIAKIDES GEORGOPOULOS Law Firm | STORIA | BSN Bufete Sánchez-Navarro, S.C. | Imaduddin and Lew Chambers (ILChambers) | Ikeyi Shittu & Co | ACCRALAW | Synch | Martina Arioli | Solak & Partners Law Firm | Norton Rose Fulbright

If you would like to be a part of next year’s edition, please contact publisher Ben Lawless ess at [email protected].