Successfully managing an outsourcing contract requires customers both to include the right governance tools and mechanisms in their contracts and then to 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 that the customer should include in its contract will vary significantly, depending on the type of relationship being created (see section 3). 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. Section 4 of this whitepaper describes the types of issues that will be addressed in the short- and long-form of each contract term.

While these contract tools provide the customer with leverage in managing the contract, they should be used knowingly, with a view to their potential impact on the relationship. Part 2 of this whitepaper (to be provided in the next edition of Middle East & Africa Technology, IP and Sourcing Focus) will analyse the potential impact on the relationship of actually using the tools.