Renegotiation has become a fact of life in long-term outsourcing contracts, and customers entering five to ten-year arrangements should be prepared for that.That’s the bottom line, according to Syd Hutchinson, senior consultant, COMPASS America, Inc. It’s unusual for a contract not to be renegotiated, he said. There’s no way you can see everything that far out, so you should go into these agreements prepared to renegotiate.
Are you getting ready to negotiate an outsourcing contract? If so, place flexibility high on the list of negotiation goals. Many customers involved in long-term outsourcing contracts in the past have learned the hard way that the restrictive and static nature of normal contract terms can tie their hands in the rapidly changing outsourced IT environment.
This relationship is recognized based on Textron’s perspective that it has allowed them to aggressively pursue acquisitions and achieve the most favorable worldwide pricing.
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