Stay the Course or Start Fresh? Outsourcing Contract Renewals Poses Dilemma

摘要

Utility executives face a dilemma when information technology outsourcing contracts come up for renewal. Operational continuity is imperative, so the idea of switching providers and risking service disruptions is unpalatable. Client organizations face significant and increasing pressure to demonstrate that the fees paid to third-party service providers are aligned with market standards. This raises the worry that renewing on existing terms, which might have reflected the market when put in place, can lock a customer into a noncompetitive agreement.