Pre-contract work

It is not unusual for the provider to suggest some pre-contract work. Cynics would argue that providers have two very good reasons for making such a suggestion. These are that the exercise will provide consultancy fee income; and that the presence of the provider in the client’s premises will minimize the chance of a competitor getting in, even if both parties are keen to disguise the fact that the work is associated with outsourcing.

It follows then that in most instances it would be wise for the client not to agree to such work until its management has decided upon its chosen service provider.

Pre-contract consultancy can sometimes be justified where the client is very concerned about the risks involved. In such circumstances the client’s senior management may feel that any additional cost (for much of the work would need to be done anyway if the contract goes ahead) is well justified.

If pre-contract consultancy is agreed upon, then typically, it will cover:

• the documentation of existing systems at all relevant sites in order to confirm the final design of systems for the outsourced services;

• a risk assessment to identify major areas of potential failure or delay in both service delivery and any new systems implementation contemplated; and

• the production of detailed specifications for each function to be transferred and, if relevant, a detailed systems implementation plan.