As I am currently investigating the subject of IT outsourcing contract renegotiations for a feature I am writing, see my earlier post, I will delve into some of the technology challenges that might instigate a contact renegotiation.
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Peter Schumacher, CEO at management consultant The Value Leadership Group, gave me his thoughts.
One thing he told me is that understanding how to apply new technologies and applications like social media and cloud-based applications requires progressive thinking and new approaches, which many service providers lack.
He said: “Many customers we have recently spoken with believe that many IT services firms have not invested enough into understanding these new opportunities and have not done a good enough job at integrating them into their offerings – or in other words much of their thinking remains obstructed by outdated thinking around legacy-based solutions. This is causing frustrations amongst progressive customers and causing them to revaluate their options.”
The problem with fixed term arrangements is that when new technologies become available there is not always a contractual cattle prod to get a service provider to introduce it.
Peter Schumacher says businesses should Demand more flexibility and pro-activeness from IT services vendors to solve this problem.
Have you recently had social media and cloud based applications integrated by a service provider as part of an existing contract?