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Switching from your current outsourcer - What to consider while structuring new deal

Considering an alternate vendor is now becoming a norm for older deals (3-7 years) or ones that were not signed through structured competitive vendor selection process. The service delivery and pricing models have evolved over a period of time. Also the clients outsourcing for the second time are more aware of what they want from their vendors and have developed capabilities to manage vendors over a period of time.

 

A lot depends on the engagement scope and client's priority - however any good deals signed will have some variation of these aspects

  • Flexibility of skills on a set forecast
  • Productive hours instead of FTE concepts
  • Focus on relationship management, governance and transparency
  • Greater involvement with offshore teams - recognition and rewards
  • Credits and penalty on performance
  • Infusing CoEs and Vendor innovation
  • Pay for performance/Outcome based models
  • Retaining key incumbent vendor employees  

 

Switching to new vendors also comes with realization that the relation with the incumbent is beyond mending. A lot of focus is made to implement the lessons learned from broken deal and to start new relationship at the right note. Clients also focus on streamlining internal processes that would result in making the vendor more effective and efficient.

 

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Posted by Ratish.p on Monday, September 19, 2011 7:54 PM
     
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