Outsourcing Lessons Learned: Engage in Shorter Deal Terms

G00170792

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Summary

Long-term outsourcing deals (generally more than five years) can eventually limit price-competitive flexibility, technology improvement and service excellence. IT leaders and sourcing managers must understand the relative impact of term lengths on current and future performance objectives.

Table of Contents

  • What You Need to Know
  • Analysis
    • Context
    • Analysis
      • Clients Need to Move Away From the Traditional Outsourcing Approach
      • Understand the Potential Benefits of Long-Term Deals
      • Understand the Limitations of Long-Term Deals
      • Most Seven- to 10-Year Deals Require Renegotiation After About Three Years
      • Deal Terms of One to Five Years Can Balance Flexibility, Cost and Functionality
    • Key Facts
  • Recommended Reading
© 2009 Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction and distribution of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Although Gartners research may discuss legal issues related to the information technology business, Gartner does not provide legal advice or services and its research should not be construed or used as such. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The opinions expressed herein are subject to change without notice.

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