Contracts in Multi-Provider Environments - Part 1
The handling in a multi-provider environment is a challenge.
The drafting and termination of sourcing contracts and everything in between, in other words how a contract is lived, often leads to challenges for our customers that are not easy to manage. Especially in a multi-provider environment, the handling is not easy and therefore we want to address exactly these challenges in a blog series here.
Companies, especially those that are part of a corporation or group of companies, regularly face the challenges of a multi-provider environment when procuring their ICT (information and communications technology) requirements.
The experience of the last few decades of “first-generation outsourcing” has taught us that, even the targeted and well-thought-out management of a single supplier requires extensive consideration and structural measures within the company of the client. When the number of suppliers multiplies – i.e., in a multi-provider environment – the demands on the client are inevitably multiplied as well.
How can a client ensure the control of all service providers for its own information and communications technology?
The proven means of choice is “SIAM” – Service Integration and Management. A practical school of thought for the efficient management of tasks arising from a multitude of suppliers. SIAM offers a set of measures for managing and controlling the services provided by the suppliers – “providers” – as a whole.
All the possibilities that SIAM offers, all the considerations and solutions that result from it, do not only manifest themselves in “internal” documents. All of the results are condensed and “externally effective” in a document that not only comprehensively regulates the legal relationship between the customer and the service providers, but also ideally serves as an operating manual for all parties involved in the joint business: the contract document.
The contract as an operating manual.
The contract should contain everything, regulate everything, starting with the signing of the contract in turn, through smooth implementation and ongoing optimization of operations, to the final step – the end of the contract with the “disentanglement”: the disentanglement of the previously established, intimate relationship between the client and the respective provider with regard to the ICT services concerned. At the same time, however, the contract should not contain excessively rigid specifications, should offer scope for adjustments, and should anticipate regulations that can only be sharpened in the course of the implementation phase as a development template.
SIAM envisages four “key stages” for the implementation of multi-provider outsourcing:
- Discovery & Strategy;
- Plan & Build;
- Run & Improve.
Although the actual contracting takes place in phase 2 “Plan & Build”, the preparatory work for this should already begin in the initial phase “Discovery and Strategy”. Viewing existing contracts at an early stage and integrating them conceptually into the SIAM planning of the mutual rights and obligations of all parties involved saves time and grief.
In the “Plan & Build” phase, the draft contract is created, specified, and finally approved by the client for the discussions that lead to the conclusion of the deal with all providers. As already explained, the contract finally concluded by all parties involved serves as an operating manual and guide rail for all further phases of the process.
Learn more about interesting legal topics on multi-provider governance in the near future or contact us now if this topic has aroused your interest.