For Sourcing & Vendor Management Professionals

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	October 28, 2008 Embed Innovation Within The Sourcing Contract Contract For Above- And Below-The-Line IT Services Impacts by Euan Davis with Andrew Parker

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Executive Summary

The innovation labors of vendors disappoint sourcing decision-makers. To avoid this disappointment, sourcing groups should link innovation with two broad themes — driving transformation or lowering cost and risk. These themes represent innovation delivered above the line or below the line. Either focus requires clear contract support to ensure meaningful innovation delivery. Building innovation into the contract and ensuring delivery through governance means that both sides understand mutual obligations and shared incentives. Success requires both sides equally to commit resources, meet regularly, and fulfill the letter and spirit of the contract rather than rely on esoteric, often unstated expectations.

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