The Outsourcerer's Apprentice

A major transformational outsourcing deal is a transaction like no other -- a transaction that many executives struggle to get right. Part divestiture and part joint venture, coupled with the typical six-month negotiating period and the potential for misstep makes it easy to see why executives spend agitated nights worrying about these deals. However, the goal for both the outsourcer and the service provider is reciprocal: getting the best possible deal while still laying the groundwork for a fruitful, long-term collaboration.

“It is important to use the contract talks to start the process of building the foundation of trust so that the relationship can grow and prosper,” says Gregg Kirchhoefer, head of Kirkland's outsourcing practice group. “Should you win every point in a negotiation, you might end up losing the war.”

This article appeared in its entirety in the December 9, 2004 issue of The Deal.