We offer our clients a collection of tools, processes and practices we have developed and proven over years of handling complex outsourcing transactions.
Executive sponsorship and approval are essential to the success of any outsourcing transaction. Before investing substantial time and money in any outsourcing project, the company’s executives should understand what is being outsourced, as well as the political, financial and workforce implications of the decision. We assist clients in educating the project sponsors about the process and mapping of a strategy to communicate with, and seek approval of, senior management and the board of directors, if necessary. The better informed senior management is about an outsourcing project, the smoother the process will be.
A successful outsourcing transaction demands integrated and seamless teamwork from all members of the business team and its advisors. To ensure that members of the team begin with a shared understanding of the deal ahead, we offer tutorials in which we familiarize the team members with the terms, timelines and documentation involved in the outsourcing transaction, and review the roles of all participants. Because complex outsourcing transactions can challenge even the most experienced business teams, we believe preparation is essential for success.
Commercial Drivers and Strategy
Companies elect to outsource for many reasons. We work with our clients to ensure that the particular strategic benefits they seek from their outsourcing transactions are reflected in the structure and terms of their deals. We accomplish this through a three-step process. First, we work with our clients to define and document their specific commercial goals for the transaction, advising them of the options available within the marketplace. Second, we align the commercial goals with the contract terms that will give our clients the leverage they need to achieve those goals, as further described below. Lastly, we counsel our clients about the likely trade-offs that will be necessary to achieve the desired terms and make any resulting adjustments to the commercial strategy. The final product is a commercial strategy that acts as a constitution for the deal team.
Determining what our client desires is only the first step. The next step is to negotiate a contract that embodies our client’s commercial strategy and delivers its intended benefits. To keep the team on track, we prepare for and conduct negotiations in accordance with a “negotiations playbook” that describes opening, fallback and bottom-line positions for all key contract provisions. By carefully mapping commercial goals to contract terms, and following the strategy adopted by the team in the playbook, we increase the likelihood of our client getting the deal it wants, rather than leaving the outcome to the results of day-to-day negotiations.
Transition is a critical step in every outsourcing transaction, and a smooth transition process will allow our client to start realizing the benefits anticipated from any changes in the relationship sooner and with less disruption. The transition phase can be very challenging, however, as operations and business realities often conflict. Our team is adept at counseling clients through the transition phase in a manner that helps to build, not dislodge, their relationships with vendors. We also ensure that the contract terms bring appropriate levels of focus to the criticality of a successful transition.
Renegotiations and Exits
It is not unusual for long-term outsourcing transactions to require adjustments from time to time as business priorities and technologies change. Whether the deal requires fine-tuning or a wholesale restructuring, we work closely with our clients to realign deal terms with our clients’ current business goals. Renegotiations and restructurings require a slightly different skill set than that required in negotiating a deal with a new vendor because both parties have the benefit (and sometimes the disadvantage) of prior dealings. While there is a significant benefit to knowing what the other party brings to the table, it is possible for that knowledge to become baggage when attempting to modify or restructure the relationship. Our lawyers help the client to look at the deal objectively to achieve its new goals while addressing the realities of the existing relationship. In doing so, it is important to contractually expand upon the aspects of the relationship that are working well and correct those that are not. Vendors often take the position that such change is not necessary, since the parties have an established method of dealing with one another; however, renegotiation is the perfect opportunity to address these structural concerns.
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