7 Ways To Address Unknowns In Outsourcing Contracts

There is good reason to be uncertain about what 2024 will bring for companies outsourcing critical business functions.

A year ago, for example, few were predicting the surge in new generative artificial intelligence products or the widespread technology industry layoffs we saw in 2023. Generally, business uncertainty appears far greater now than during the 1990s, when outsourcing business models were developed. Thus, there is also good reason to focus on how to address that uncertainty.

This article describes contracting approaches now being used to address uncertainty in large, long-term outsourcing transactions. Uncertainty is a major factor in those big deals because success relies on numerous factors, decisions become increasingly difficult to reverse as the deal progresses, and a failure can damage the prospects and reputation of the entire company. However, many of the lessons learned can be applied across a wide range of outsourcing contracts