11 ways to address RPA and AI in IT outsourcing contracts

IT service providers are increasingly using robotic process automation and artificial intelligence capabilities, but their customers may not be reaping the full benefits.

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7. Analyze whether the use of RPA and AI software affect compliance with software licenses.

“Third party software, such ERP software, may have restrictions or pricing based a specific number of resources, such as the number of users, that are replaced by RPA or AI software,” Roy says. Licenses may also restrict software’s use with other systems not approved by the licensor.

8. Think through ownership and use rights for RPA and IA solutions and whether such solutions could be managed in-house once deal is done.

Many providers have their own RPA or AI software or configurations that are not generally commercially available. “The question then becomes how the customer manages the risk of unexpected cost or disruption to its operations on exit,” says Roy “In some cases, it may be sufficient for the customer to have RPA configurations specific to the customer’s operations or the databases, algorithms and insights generated by AI solutions [in order] to allow the customer or its replacement provider to recreate similar solutions.”

9. Considering who owns what, particularly what AI systems learn as they get smarter.

“Since AI software in its most sophisticated form does not generate any discernible code, the customer’s ability to replicate it is questionable,” says Roy. But customers must be clear in understanding the extent of their ongoing reliance on AI-enabled software. Another important issue is who owns the intellectual property generated by AI-enabled systems. “This should be explicitly addressed by the customer in its agreement with its provider since there may not be any clear answer under applicable law if the parties are silent on the issue,” Roy says.

10. Include provider commitments to adapt RPA and AI systems to the customer environment.

RPA solutions, in particular, are designed to interact with existing systems, so the configurations of RPA solutions may have to be adapted to changes in the systems with which they interact,” Roy explains. “To the extent these systems include customer’s systems, the provider should be required to make corresponding adaptations in the RPA configurations when needed.”

11. Evaluate hybrid customer/service provider RPA or AI solutions.

On one hand, the customer may be best able to control their own destiny by licensing AI or RPA software and requiring that their service providers use those systems. On the other hand, providers may be most successful by leveraging their own RPA and AI solutions. “Determining where the balance is between those alternatives will be important for customers who want to achieve cost savings while mitigating risks,” advises Roy.

When addressing the impact of RPA and AI on existing outsourcing deals, customers should take care to address the issues that will arise with these newer technologies, but not be so specific that these new provisions are too rigid to adapt as technology evolves.

“Customers need to recognize that it is not possible to predict, with accuracy, how the technology landscape will develop over the next few years. The only certainty is that such a landscape will look materially different from how it looks now,” Dickinson says. “Customers need to adopt ‘future-proof’ provisions, which recognize the introduction of new technologies, but generically, as opposed to by reference to specific technologies and solutions.”

Copyright © 2017 IDG Communications, Inc.

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