A
Non-Disclosure Agreement (NDA) is a term which describes a pact between
two or more parties. It is used to limit the original members from
telling the information to someone else or to someone who is not part of
the initial agreement. Such an agreement is usually done to make sure
that important information is not leaked or is made public. Such an
agreement is necessary to use when trade secrets are discussed and is
used when a new and previously not known technology is used. Usually,
this type of agreement is signed when organizations are in practice of
using the concept of outsourcing.
Outsourcing
is somewhat of a new procedure where organizations are looking for
cheaper way to get their work done. Outsourcing can be either Near-shore
or Off-shore. The major difference between the two methods is based on
geography. In near-shore outsourcing practices, an organisation looks
for closer partners to work with. Partners with which the outsourcing
firm shares the same time zone, language and work standards are
preferable. In contrast, when offshore outsourcing is used, firms work
with partners who are in a completely new region which follows a
different time zone and has different working standards. Firms when
using the concept of outsourcing for software development need to share
important information with their partners and trust them that the
information will not be leaked or made available to a third person. In
such case, outsourcing firms usually ask their outsourced partners to
sign an NDA. The importance of following such a practice is high because
companies, while outsourcing, allow outside employees to go through
private details of the firm like information about the company’s
shareholders and the type of technology and working methods they use. If
such information is made public, competitors and rival firms can
significantly benefit from it.
Companies
using outsourcing partners to develop software for any purpose are more
careful and usually ask their offshore software development partners to
sign a NDA form. Obviously there are threats in offshore software development
and these firms must be careful of virus attacks or being a victim of
counterfeiting. In some cases, firms ask their outsourcing partners to
develop certain software to operate machinery or equipment which is new
and not many people are aware of it. This technology may be part of the
firm’s strategy and the organization does not want that information be
disclosed. In this case, having a NDA with the outsourced partners is
critical as they are aware of what information they cannot disclose to
an external source. Furthermore, the benefit of using a NDA is that it
makes sure that there are no communication gaps between the two
partners. Everyone is aware of their roles and they know what is right
and what is wrong. This allows the entire work procedure to run smoothly
without any unnecessary stoppages.
Lastly,
for those businesses that are using outsourcing to develop their
company software must be aware about the use of NDA. Through an NDA,
they can limit the use of their outsourcing partner and restrict them
only towards the actual job they are hired to do. The outsourcing
organization can always be in control when using NDA. If something goes
wrong through the use of NDA, the firm can control the damages. Also the
outsourced partner is aware of the legal cost if they break the pact.
Therefore, it is good that firms who use outsourcing partners make a NDA
and get it approved by their partners. Businesses that are in the
information and technology industry are now adopting the use of NDA as
outsourcing has become a common practice.
Mindfire Solutions has already carved a niche for itself as one of the premier vendors offering offshore software development services
to its SMB clientele and help them excel in their core business. If you
are interested to hire the expert software services of this 16 year old
organization then do send in a mail with your requirements to sales at
Mindfire Solutions dot com and we will get back to you in 72 hours.