IT Outsourcing Contract Negotiation Playbook: An Introduction
IT outsourcing contracts are not naturally a zero sum game. Although the prospect of failure is very real, most of the time matching the right customer and offer is a win-win for buyer and seller alike. However, more often than not it plays out as a win-WIN scenario — with one side getting just a bit more of the pie than they deserve given their investment. Most of the time my job is to put the “capital W” in the buyer’s hands, but I’ve had a go at supplier strategy as well.
The real wins and losses are not determined in the top-line numbers that bubble up to executive summaries, but exist in the asterisks and fine print buried inside the master services agreement, order form, and service level agreement. My goal is to share tidbits from each side’s contractual playbook to show how innocent-looking terms can shift the balance in an outsourcing relationship and what you can do to either eliminate the imbalance or mitigate it through a compromise if the other side digs in.
The concept of capturing the “capital W” applies across a broad cross-section of outsourced services from bandwidth to data center to managed services and CDN.