Rigid Outsourcing Contracts

Filed in archive Outsourcing Issues on June 17, 2007

Some companies expect that in an outsourcing deal, outsourcing contracts should be rigid and not flexible. This expectation is not true because as what I've mentioned before, outsourcing is changing all the time.

This is the reason why a more "lenient" outsourcing contract is important so that companies and outsourcing vendors would be able to handle the changes that they would encounter during the duration of the outsourcing deal. This article also explains this myth further by stating that:

"Sometimes deals are so inflexible that customers must sign a fresh contract to handle any unexpected changes, such as new industry regulations or a change in business strategy. The "simple" act of negotiating and writing a contract also brings high legal fees, and it may lead to productivity losses, as middle managers hold up a job until a new agreement is in place."

The bottom line is expect the unexpected and this includes the implementation of outsourcing contracts.