June 26, 2012 Focus area: Strategic Sourcing
Outsourcing Lifecycle Strategy
Few organizations actually use outsourcing contract expiration to their advantage. This while it provides a clear opportunity for addressing, if any, dissatisfactions with the current sourcing supplier(s) landscape and adapt it to your future ambitions and objectives. Clients can choose to continue, rescope, renegotiate, re-tender or (re-)internalize the contracted services. Preference for an option generally depends on your objectives and satisfaction, regulatory limitations, supplier’s ambitions, vendor lock-in, availability of alternatives, risks, staffing consequences, economic reality and financial consequences. Do not just conveniently continue or transfer your business to a competitor as-is. Use the contract expiration milestone as an opportunity to really reflect on recent experiences with your current suppliers, and developments within your own organization that require IT to adapt and enable. Handling contract expiration well, allows you to make changes that result in improved service quality, costs, satisfaction on the cooperation with your suppliers and the value of IT for your organization. Not acting means getting the same service in the future as in the past, even when business demands for IT do change.