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7 Secrets to Renegotiating your Outsourcing Contract
By Mike McGarry, Managing Consultant, Alsbridge, Inc.

Despite the maturity of outsourcing practices, a surprising number of companies lack the necessary expertise needed when it comes to negotiating a contract, which leads to outsourcing relationships that do not provide benefit to either the client or the provider.

A strong and satisfied client relationship is essential especially during a contract negotiation. Whether you are negotiating an outsourcing contract for the first time or renegotiating an existing contract, clients must continuously evolve, improve, and innovate to develop stronger, longer-term, and more trusting relationships with their service providers.

This article outlines seven key success factors in negotiating a contract that can help your firm avoid or recover success from a poor outsourcing relationship.

First, hire an outsourcing advisory firm to work with you throughout the contract negotiation process. These advisory firms eat, sleep, and breathe outsourcing. They know which providers can meet your needs and what is happening in the market. With their deep industry expertise, these advisors have the essential processes, knowledge and experience needed to acquire a market leading deal. Also, these advisors have expertise knowledge regarding the features of an outsourcing contract including pricing, services considered standard in the industry, service levels, and all other business aspect of outsourcing.

Second, hire an external counsel that specializes in outsourcing. A solid outsourcing contract is important, standard purchasing terms and conditions are not enough. Similar to outsourcing advisory firms, outsourcing legal firms understand the nuances of contract language and often have experience understanding how courts have interpreted contract language. Hiring an external counsel that specializes in outsourcing will help you avoid issues should your outsourcing relationship start to deteriorate.

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