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Renegotiating outsourcing contracts to fit new reality
This article is part of the December 2012 issue of CWEurope
Downturn drives renegotiation Position of strength Haggling Change is good Organisations in many sectors seek to renew the terms in their contractual agreements as they adjust to the economic climate. IT outsourcing is going through a period of major change as the result of an economic downturn of extreme proportions alongside major advances in technology. Tight budgets amid recession and increased service options as a result of new technologies, such as the cloud, mean many IT outsourcing contracts are no longer fit for purpose or the best option available. For example, a bank might have signed a 10-year agreement to outsource its datacentres in 2006; since then, a lot has changed. The financial services crash of 2008 might mean the bank has fewer customers, processes a smaller number of transactions and has less money. At the same time, cloud computing has matured, meaning the bank does not require as much datacentre space and does not need to pay for equipment up front. Retail, manufacturing and travel sectors are all ...
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