By Alsbridge, Inc.

Alsbridge predicts Cloud-based delivery of applications will account for half of the market within 5 years and outsourcing e-mail as a service will be routine within 2 years.

The key to all successful outsourcing relationships is the quality and flexibility of the commercial agreement between the customer and the supplier. An IT outsourcing contract can be anything from a highly complex and weighty document to a shorter ‘consumer’ style arrangement, but either way it is crucial to all outsourcing relationships as it provides the legal framework between the organizations involved.

As with contracting for traditional ITO services, a detailed understanding of service provision and delivery is vital before entering into Cloud-based contractual commitments.

However, as contracting for services in the Cloud becomes the new standard, it will require a different set of contracting principles and a new basis for customer and supplier relationships. It is a case of adapt or die; those slowest to market will be left behind.

An IT outsourcing contract must stand the test of time, which means that it continues to meet both parties’ expectations during the lifetime of the ITO contract, not just at the start or key milestones.

This paper defines the key principles for what constitutes a ‘good’ contract and deal management organization in the current outsourcing landscape, and addresses the key challenges for ITO contracts in the future Cloud-based, on-demand IT and business services environment.