The last few months have seen as much "re-sourcing" activity as new outsourcing activity, experts say, and it shows the willingness of service providers and customers to reshape deals to matching evolving conditions. Finding a new provider can be less expensive than bringing outsourced work back in-house, but it can also be complicated, reports Stephanie Overby at CIO. Overby presents 10 recommendations for re-competing a deal. 

A smooth transition requires cooperation between the old and new service providers, but the old one may not feel very motivated. "Incumbent providers rightly view replacement providers as competitors. They are not inclined to provide replacement providers with the same knowledge transfer and access to their personnel, intellectual property and other proprietary resources as they provide to their customers," says Jeffrey Andrews, partner with the law firm Thompson & Knight.

The first thing to do is determine whether the reasons for outsourcing are still relevant, and then take the time to figure out whether the relationship with the current provider can be salvaged. The disruption inherent in moving the work will entail costs and risks, and that must be weighed against the benefits. Next, take a look at the contract end date and early termination fees. Some contracts prohibit resourcing, while others spell out the provider's responsibility to help with a transition to a new outsourcers.

Some services are easier to transfer than others. If labor, hardware and software are included in the deal, it can be more complicated to move the work to another provider. Commodity-type services, such as disaster recovery or data center services, may be less complicated to transfer.

If it makes sense to move to a new outsourcer, be sure to apply the lessons learned and ensure that the new contract gives you more leverage the next time around. 

For more:
- see Stephanie Overby's article at CIO

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