Hint: 12 Months Out is TOO Late

By Robert Joslin, Managing Director, Alsbridge, Alsbridge, Inc.

When should you start working on your next outsourcing contract? Many organizations do not address the end of a contract until the last year of its term. However, this is a mistake.

Developing an end-of-term strategy for an outsourcing relationship is a complex task, because it is about much more than the contract. Creating an end-of-term strategy takes just as much, if not more planning and effort as the original outsourcing scope because you will need to take into consideration the complexities the current outsourcing relationship as well as the market changes and internal learnings.

This industry is not new to change, but never before has it experienced the number and magnitude of changes we have seen over the last decade. The approach that organizations take to address their end-of-term strategy should be based on adjusting to the constant changes in their businesses and the service delivery offerings that are available to address those needs.

Organizations experiencing an end-of-term event in the next 18-to-24 months must develop a detailed strategy that addresses not only the pending contract expiration but the internal and external pressures as well. They must complete an analysis to determine the correct direction.

Too many organizations look at the end of contract as just a pricing exercise when it is really an assessment of how an organization can realign the services it is currently receiving with its new requirements. That may be the time to continue to receive services from the incumbent as well as add new ones now available in the market. This article will walk you through how to conduct a proper end-of-term assessment that can determine the proper strategy.