Contract management a must-have when outsourcing IT

Outsourcing IT infrastructure is no longer a “new” trend: it will soon be the status quo, at least according to one study.

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Photo Credit: Mike Licht, via Compfight cc

A study by UK-based market research firm Vanson Bourne recently came to the conclusion that by 2017, fully 70 percent of IT infrastructure will be outsourced. Researchers queried 550 IT professionals from a global sample that included responses from Germany, UK, Japan, the US, Canada, Hong Kong and Singapore.

That would be very quick flip from the current state of IT infrastructure, which is estimated currently to be about 65 percent in-house. It should be noted that the Vanson Bourne study was conducted on behalf of Savvis – the CenturyLink outsourcing company. Nonetheless, the study certainly confirms what many feel is happening.

As IT infrastructure blogger Arthur Cole wrote in an October blog at, “Indeed, it seems that the approach to outsourcing has shifted from ‘Should I or shouldn’t I?’ to finding the best way to maximize external infrastructure.” In other words, Cole thinks it’s clear the conversation has shifted from “should I” to “how do I … “

Cole noted that other industry observers have noted that this big push to outsourced IT isn’t a cure-all. In fact, it brings along its own host of new issues (not necessarily problems). Among those new concerns is a better model for managing those outsourced resources.

Given the mission-critical nature of IT infrastructure, it only makes sense that these vendor relationships be managed as effectively as possible.

That means making sure these contracts fit under the umbrella of a contract management strategy – and solution. Having a contract management solution in place before outsourcing critical parts of your IT infrastructure can save a lot of time and headaches.

Especially if, like many companies, your enterprise outsources portions of its IT infrastructure over time. The reality is that not many companies can afford a “let’s move everything right now” strategy for outsourcing IT. That means most companies – especially small and mid-size – tend to negotiate a number of IT vendor agreements over time, piece by piece. That can quickly lead to a patchwork of service level agreements (SLAs) and contract commitments from many vendors.

Having a contract management solution in place will allow your enterprise to:

  • — Store related SLA documents for different IT services in one database – making it easier to retrieve and compare agreements.
  • — Allow contract database admins to record SLA or compliance breaches over time in notes sections.
  • — Ensure that vendor agreement commitments beyond SLAs get reviewed (by using review-by and contract end date alarms, for example).
  • — Allow for quicker cost and expense comparisons by using contract database financial summaries.

It should be noted that a solution such as Contract Assistant makes all of the above possible. Even the basic Standard Edition of Contract Assistant allows users to link to documents related to a specific contract; other versions such as the PRO and Enterprise editions allow for storing related documents in one database.

Of course, whichever contract management solution you choose, the point is the same: when you are dealing with critical parts of your IT infrastructure, you should first ensure that those vendor relationships are actively managed and tracked.