Perhaps unsurprisingly, the most common term for renegotiation
is the price of the contract, according to research commissioned by
Pinsent Masons, the law firm behind OUT-LAW.COM. One in ten
respondents said that they intend to bring outsourced processes
back in-house.
Nearly two-thirds (63%) of the businesses polled said they would
not be reviewing their outsourcing arrangements with their current
supplier, mainly to avoid the time-consuming and expensive tender
process associated with a new procurement process.
It is widely regarded as best practice for a business to review
regularly its outsourcing suppliers. However, because most
businesses are focused on reducing costs, relatively few are asking
their outsourcing vendors to retender this year.
Garfield
Smith, a partner at Pinsent Masons specialising in outsourcing,
said that a good understanding of sourcing options is a necessary
precursor to any renegotiation review.
"Our survey indicates that sourcing has not yet been given the
priority that it merits," said Smith. "Businesses are concentrating
on more traditional measures to save costs and this may impact the
ability of a business to respond when there is an upturn."
"Our expectation is that once traditional measures have been
exhausted, sourcing will move higher up the corporate agenda," he
said.
Pinsent Masons interviewed 200 business leaders in
privately-owned, listed and internationally-owned businesses in
March and April.
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