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Exit management is vital to outsourcing

John Riley
Despite a forecast rise in outsourcing over the next few years, organisations are signing out-of-date contracts before they get under way and not building in escape routes.

A fundamental change is taking place in the way businesses outsource IT, said Roger Cox, Gartner vice- president, speaking at the Gartner Symposium in Cannes this week. "Long-term deals are being struck on the basis of one year's frantic transformation followed by six years 'steady state'.

"But the reality is that there will be no steady state, only continuous transformation. Service providers will increasingly find themselves unable to sell long-term deals that allow for continuous change," said Cox.

In this climate it is vital to have an effective exit strategy built into the contract, stressed Gartner director Alastair Henderson-Begg, but few people consider this.

"People don't understand how important exit management is - they haven't even thought about it," he said, "and service providers are unwilling to talk about exit management.

"When it comes to exit management, there is an absence of process - it is usually a collection of personal relationships," he said, adding that the catalyst for change is likely to come

from the area of company risk and audit. Having a good outsourcing exit management plan is more important than having a disaster recovery plan, but hardly any users even think about it," he added.

Gartner Group expects outsourcing in Europe to grow year on year at a rate of 14% through to 2005.

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