Finally, if you are the customer, you should draft the contract to be sure it describes the transaction that the company wants. The contract should specify which party will be financially, administratively, and operationally responsible for each of these resources, including various types of front-end integration, reengineering or transformation involving complicated infrastructure and process changes which need to be specified in the contract. Human resources is a particularly sensitive area. Cooperation and continuity of the customer's staff, which has vital knowledge about its business and technology, are often critical to a successful transition. During the performance phase, the vendor performs a defined scope of services at the agreed-upon price and service levels.
Pricing is the most challenging aspect of structuring a successful contract.
Customers should be careful not to focus exclusively on the base charge quoted by the vendor. The customer's actual resource usage may vary significantly from the baselines over the life of the contract. Therefore, financial modeling of the vendor's charges of various levels of resource usage is essential. To the extent practicable, the outsourcing contract should minimize the need to renegotiate pricing. After the keys are turned over to the vendor, the customer loses much of the knowledge and negotiating leverage it had before the contract was signed.