When time is precious, such as during the heat of a merger or divestiture, there's often a temptation to grasp quick solutions to even the most complex challenges. It's often the case that decision makers face make-versus-buy considerations when evaluating how to handle back-office services such as IT, HR, and finance. The question becomes: Can we contract for services quickly to ensure orderly achievement of critical business functions without having to go through a long process of competitive solicitations?
The answer is an unequivocal "yes". There are certainly techniques to rapidly contract for essential business services with a single provider of choice. But then the question becomes: Is that the right response for a specific situation? It obviously depends on a range of factors, including the existence of a prior/current services relationship, the market-worthiness of the proposed commercial terms, the level of oversight in the proposed relationship and whether or not there are considerations that might present the perception of conflicts.
It's been proven often in the outsourcing industry that "time kills deals". A reasonable corollary is that lack of time kills "competition". Because no one wants to overpay or find that the contracted services are substandard, we advise clients who are thinking about an accelerated transaction with a single candidate provider to get organized early on and take advantage of the best market intelligence to quickly nail down things such as contracting terms, pricing and service delivery integration.
There are many reasons why a sole-source transaction might be the right answer. Yet there are equally many pitfalls to circumventing the competitive process. Ultimately, it's a business decision that comes down to a risk/reward tradeoff based on good due diligence.
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