Successfully managing an outsourcing contract requires customers both to include the right governance tools and mechanisms in their contracts and then use those tools appropriately. Outsourcing contracts are not all created equal — the relationships they create can range from that of a customer purchasing a service from a supplier to something more akin to a partnership. The governance tools a customer should include in its contract will vary significantly, depending on the type of relationship being created. Even where governance tools are included, the extent to which the contract needs to deal with each tool, either in particular detail or relatively short-form, will also vary depending on the tool’s relevance to the relationship type. Part 1 of this whitepaper described the types of governance tools that the customer should include in its contract and discussed the extent to which the contract needs to deal with each tool.

This part of the whitepaper analyses the potential impact on the relationship of actually using the governance tools described in Part 1. As stated in Part 1, while these contract tools provide the customer with leverage in managing the contract, customers should use the tools knowingly, with a view to the potential impact on the relationship.