At the end of an outsourcing contract term, buyers have four choices: renew the existing agreement; renegotiate terms; seek a new partner through a re-bid; or take services back in-house. Traditionally, renewal was the most frequent choice of action, largely because of the cost, complexity and operational risk associated with change.
Today, a number of factors are changing this dynamic and significantly raising the stakes for businesses. For one thing, multi-vendor arrangements, coupled with a long-term trend toward smaller and shorter-term agreements, mean that end-of-contract decisions must be made on an ongoing basis. Perhaps more importantly, a rapidly moving technology landscape, characterized by ongoing innovation and increasingly specialized service providers, puts buyers at risk of either missing out on critical emerging capabilities, or making the wrong choice when selecting a supplier.
This ISG white paper, co-authored by a Millbank Partner specializing in outsourcing agreements, examines recent market trends and how they affect buyers and providers as they approach end-of-contract decisions. Specifically, the authors describe the implications of multi-sourcing, cloud computing and Robotic Process Automation (RPA), focusing on considerations from both a sourcing strategy and a legal perspective.
About the author
