Description: If, due to circumstances beyond your control, your outsourcing vendor goes out of business, your team members need to have a job and will be looking for the next company to work for, taking their knowledge with them, perhaps to your competitors.
Solution: These situations happen for one reason or another, so why not prepare for it. Add language in to your contract with your outsourcing vendor that gives you the option to take over the team if something does happen to your vendor. Make sure key persons on the project know about this option so no one is in the dark if something does happen. Define what taking over the team means, will you, as part of the contingency plan, set up your own facilities in the offshore country, or will you have the option to move the team to another vendor, with the help of your current vendor.
You will notice that through these 9 IP issues, I have not mentioned technical protection. This is because it is a given that, since we are all in the technology field, that technology will be used, to the extent possible, to protect your IP. This may include firewall protection, encryption protection, blocking of the use of external drives, etc. It is also a given that you have the appropriate processes in place to assure that the technology is being used and monitored correctly. For example with the use of encryption, you may want to put in place a secure process for transferring your code between your offshore vendor and your onshore location, or transferring any type of documents in a secure manner. It may be a long shot that any of your code or any of your documents will ever fall in to the wrong hands, but why take the chance that it is sitting on a server some place for your would be competitors to get their hands on.