Increasingly, (parts of) IT departments are outsourced to an external supplier which the supplier services that their IT department originally supplied.

Outsourcing has advantages as cost savings as well as disadvantages and even risks.

The most common risk is that the supplier does not comply with the agreements. There are even special terms defined to indicate how the supplier fails:

Shirking is when a supplier systematically under-performs when they are fully paid for it. For example, declaring more hours than actually worked.

Poaching is when the supplier abash it’s competitive position of trust sensitive information to or specially developed solutions for the customer to other customers to use.

Opportunistic repricing occurs when a customer over time more and more becomes dependent of the insourcing party. This allows the dominant party unilaterally insourcing the financial conditions of the contract to change, the customer is his dependent. By ensuring that the business contract is legaly closed, a lot of the misery can be prevented, but it’s ultimately important to build confidence between the outsourcing and insourcing parties. For the creation of mutual confidence it’s important to build and maintain a good relationship.

Recent research show that in 60% of the cases, the contractual relationships are disappointing and, the outsourcing relationship in as much as 58% of cases stops eventually.

To prevent this, we can assess the outsourcing relationship and we give independent advice implicitly how the relationship can be improved.