CIO shortens leash on outsourcing contracts

While outsourcing offers a tremendous opportunity to free up resources and reduce costs, one CIO believes that long-term contracts can breed contempt. According to Steve Reneker, CIO of the City of Riverside, California, it can sometimes be a challenge to keep outsourcers motivated past the honeymoon stage in a multi-year engagement. His solution: shorten terms, and revisit the efficacy of the relationship frequently. This way, no one gets too comfortable. 

Reneker this week signed a three-year outsourcing contract with Affiliated Computer Services Inc. out of Dallas. The contract could be worth up to $17 million… if it goes the distance. Under the terms of this agreement, ACS will work for one year, with two one-year renewal options. This is Riverside's second time around with ACS. In 1997 under a 10-year contract, ACS was hired to take over much of the City government's IT operations. While he told Computerworld that the "company is doing good work for the city," Reneker said that he was unhappy with a couple of things in the contract when he was brought on board in 2005. Chief among them: the rate structure and the fact that the outsourcing vendor's contract manager was also heading up the city's IT department-can you say conflict of interest? While he doesn't want to change outsourcing firms mid-project, he seems pretty committed to keeping his outsourcers in check and on their toes.

For more on this outsourcing contract:
- read the article in Computerworld