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New Point of View: Considerations When Preparing to Renegotiate an Outsourcing Contract
by David Howie, Director, TPI

Most outsourcing arrangements will be renegotiated during their term. These renewals and restructurings constitute a significant and growing portion of the outsourcing market. We estimate that in 2010 more than 500 large contracts will be renegotiated worldwide, representing a total contract value of more than $60b. In some cases, such renegotiation activity is driven by a change in service scope requirements or in volumes to be consumed. In others, the approaching end of the original term will encourage the client to seek refreshed and improved contractual conditions. More often than not, the client will also be seeking better prices. Though restructuring doesn’t necessary indicate dissatisfaction with the sourcing relationship it is a common driver, with most companies reporting that they receive less value than expected, often because their expectations were unrealistic to start with.

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New: SIG/TPI Survey on Procurement Organizations

The Sourcing Interests Group (SIG) and TPI invite procurement experts to share your opinions on The Nature of the Procurement Organization Today and in 2012. All qualified respondents will receive copies of the full report.

Take the online survey today.



TPI Index
4Q09 EMEA TPI Index
Date: January 29, 2010, 10.30am GMT
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4Q09 Global TPI Index
Date: January 20, 2010, 11:00 A.M. Eastern
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Replay: +1 719 457 0820 or 1 888 203 1112; Code 8543430

2H09 and Full Year 2009 TPI Index Asia Pacific
Date: January 27th, 2010, 3.30 P.M. (Sydney), 10 A.M. (India Standard Time)
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Outsourcing Industry Turns In Best Performance In Six Quarters, Signaling Start Of Gradual Recovery In Global Market

Total contract value (TCV) reached $24.7 billion, an increase of 47 percent sequentially and 8 percent year-over-year and the best quarterly performance since the second quarter of 2008.

View the press release



New Report Shows Europe Overtaking North America as Top Outsourcing Region

According to the TPI MomentumSM Market Trends & Insights 3Q09 Geography Report, European G2000 companies outspent their North American counterparts by approximately $1.2 billion in average annual contract value (ACV) through the third quarter.

View the press release



TPI Top 5
Top 5 Ways to Ensure Successful IT Sourcing Management and Vendor Management Collaboration


By Cynthia Batty, Global Competency Lead, Service Management, TPI


Organizations with complex IT purchasing and delivery of hardware, software and services are examining their structures and wondering how they can work more effectively. While the purchasing department usually negotiates the contracts, we often observe vendor management organizations (VMOs) scattered through areas like operations, HR and IT. For example VMOs in the IT area commonly have responsibility for the overall relationships and performance of the hardware and software suppliers.


Most sourcing clients recognize the need for a separate organization to manage sourced services (SMO) in various organizations; this can include both service delivery and relationship and metrics. Here are the TPI Top 5 tips to ensure that your SMOs and VMOs collaborate productively to yield the best results for your organization.


1. Define the terms
2. Create a clear definition of roles
3. Cooperate with data
4. Understand the difference between contracts for services and for products
5. Share business processes to achieve maximum control

TPI’s seasoned sourcing experts can help you achieve your global sourcing goals through objective advice, robust market data, knowledge of your industry and extensive experience with service management.


E-mail Cynthia Batty, Global Competency Lead, Service Management, TPI, or phone her at +1 201 978 0542 to learn more.


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