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IT outsourcing contract renegotiations are rising. Businesses are finding themselves in agreements that are no longer efficient or effective as a result of economic changes, while others want to use new technology as part of the contract.

Here is some advice from experts to businesses that are wishing to renegotiate their outsourcing contract.

"The most important thing for a company considering renegotiations is to have a clear understanding of their objectives, and what they want to get out of the restructured IT outsourcing contract. A successful renegotiation also relies on creating financial leverage, a willingness to execute viable alternatives and a strong commercial relationship with the supplier.  Another significant factor is time. Whether mid-term or end-term, companies must ensure that they allow enough time to analyse and understand all factors, which might impact the new contract and to fully engage their internal stakeholders to ensure the best possible outcome."

"It is easy to get caught up in the renegotiations process, but it should be remembered that not everything is negotiable - a company must decide on its priorities and negotiate to build a workable solution and sourcing relationship, not to win a battle."

"Be prepared to concede certain aspects (increasing the term, adding to the scope, simplifying measurement criteria, etc) in order to secure a more flexible, agile, accountable contract. Absolutely check out the financial stability of your supplier before signing anything - two major names could go before year end. Get expert legal and sourcing advice as to the real auditability and step in-rights that you have."

Be firm, honest and direct with your supplier and don’t waste their time during the negotiation process.  Let them know of your goal to achieve the omega price (the most you are willing to pay where they can still make a profit and provide a good service). Once you reach a new deal that satisfies both parties go out to celebrate to start off the renewed relationship with some fun.  More importantly, remember to keep this up during the working relationship, many challenges can be ironed out over lunch or dinner. 

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