Following the Infosys visa fraud $34 million settlement, IT outsourcing customers should take these five steps to protect themselves. Here's a look at what outsourcing customers need to do. Following its agreement to pay a record $34 million to settle claims of visa fraud and abuse at its U.S. outsourcing clients, there’s little doubt that Infosys will take a hit to its reputation. It’s hard to estimate the ultimate financial impact on the $7.4 billion company, says Michael Kushner, managing director with outsourcing consultancy Alsbridge, but it could cause problems with deal pursuit and renewals.“Infosys clearly will take a reputational hit, and that’s something competitors are likely to exploit,” says Esteban Herrera, partner with outsourcing consultancy Information Services Group (ISG). “The company will have to work hard to regain trust through transparency and compliance in its staffing practices.”But what about customers of the Bangalore-based IT service provider? They, too, could face reputational, financial, and legal risk.“Something like this could not have been happened without clients having at least some knowledge of the goings on,” says Hansa Iyengar, a sourcing and vendor management analyst with Forrester research. In the wake of this latest news, all outsourcing customers should take several steps to protect themselves and bolster their outsourcing relationships: 1. Talk to your vendor. Outsourcing consultancy NeoGroup, which has been monitoring the allegations against Infosys since 2011, is advising clients to closely monitor the situation and talk to Infosys about what went wrong and how similar instances can be avoided in the future. Now would be an opportune time to have such discussions with all IT service providers. 2. Conduct an HR audit. Undertake a full inventory of supplier resources on your accounts or ask your vendors to do so, advises NeoGroup. Identify all visa statuses and expiration dates. Specifically make note of B-1 visa holders.3. Review billing. Make sure that B-1 visa holders are not performing billable work, but are only onboard for meetings, contract negotiations, or short-term training. Work with providers to transition any on-site support that does not meet visa requirements of your account.4. Monitor immigration reform. Interact regularly with internal government relations teams to stay on top of immigration bill developments and develop contingency plans accordingly.5. Reconsider pricing models. “Clients are to blame to some extent as the major reason for this kind of ‘cutting corners’ by Infosys is the intense pressure on costs that comes from the clients’ side which constantly pushes vendors into a corner,” says Iyengar. “The present market conditions are such that there is hardly any more room for pushing prices downwards. Enterprises need to wake up to the fact that when they demand more value from the vendor, they’ll need to bear the associated costs.”Stephanie Overby is regular contributor to CIO.com’s IT Outsourcing section. Follow everything from CIO.com on Twitter @CIOonline, Facebook, Google + and LinkedIn. Related content brandpost Who’s paying your data integration tax? Reducing your data integration tax will get you one step closer to value—let’s start today. By Sandrine Ghosh Jun 05, 2023 4 mins Data Management feature 13 essential skills for accelerating digital transformation IT leaders too often find themselves behind on business-critical transformation efforts due to gaps in the technical, leadership, and business skills necessary to execute and drive change. By Stephanie Overby Jun 05, 2023 12 mins Digital Transformation IT Skills tip 3 things CIOs must do now to accurately hit net-zero targets More than a third of the world’s largest companies are making their net-zero targets public, yet nearly all will fail to hit them if they don’t double the pace of emissions reduction by 2030. This puts leading executives, CIOs in particul By Diana Bersohn and Mauricio Bermudez-Neubauer Jun 05, 2023 5 mins CIO Accenture Emerging Technology case study Merck Life Sciences banks on RPA to streamline regulatory compliance Automated bots assisted in compliance, thereby enabling the company to increase revenue and save precious human hours, freeing up staff for higher-level tasks. By Yashvendra Singh Jun 05, 2023 5 mins Digital Transformation Robotic Process Automation Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe