Updated Q3 2011: New Contract Terms For Outsourcing Deals

The body of contract best practices changes little in terms of specific terms available for governing outsourcing transactions, but their relative importance can shift in response to both ongoing and emerging trends. Since we last addressed the topic of contractual terms in 2009, the nature of the contractual risks has evolved along with the nature of outsourcing transactions. While the risk of terrorism or a sudden failure of a key supplier — then top of mind — have fallen in priorities, new issues have emerged as more likely near-term concerns. These include the special contractual challenges of cloud-oriented models, continuing industry consolidation, and a trend toward rising, as opposed to diminishing, outsourcing costs. Sourcing professionals looking to update their existing contracts can use these new terms to increase their odds for success in outsourcing transactions.