T 2.85 Inadequate provisions for termination of the outsourcing project

If an outsourcing project is carried out, this usually results in the loss of know-how on the part of the customer and in a dependency of the customer on the outsourcing service provider. Therefore, inadequate provisions for a potential termination of the contract might have serious consequences for the customer. Experience has shown that this is always particularly problematic if a case critical from the customer's point of view occurs unexpectedly such as the bankruptcy or sale of the outsourcing service provider.

Examples:

• A competitor of the customer purchases the outsourcing service provider.
• A national security agency has outsourced processes into a computer centre that is purchased by a foreign company at a later stage.
• There are legal disputes between the customer and the outsourcing service provider due to the poor quality of the service or serious security deficiencies, as a result of which a contract partner would like to terminate the contract.

Without adequate internal precautions and detailed contract provisions, there is always the risk that the customer can only terminate the contract concluded with the outsourcing service provider with difficulties. In this case, it is difficult if not impossible to transfer the outsourced area, for example, to another service provider or to reintegrate it into one's own company if this appears to be necessary.

In the following, examples of other problems that might occur in this situation are listed:

• Due to inflexible provisions regarding the right to terminate, the contract cannot be terminated in the customer's interests as needed.
• In the event of termination by the service provider, short periods of notice have the effect that there is no time for a smooth and orderly transition.
• Inadequate provisions for the right of ownership of the hardware and software used (interface programs, tools, batch procedures, macros, licences, backups) can prevent a smooth and orderly transition, for example to a new outsourcing service provider.
• Inadequate provisions for the provision with documentation might mean that it is not possible to continue the operation of the IT systems in an orderly manner.
• Inadequate provisions for the deletion of data at the outsourcing service provider's premises might result in confidential data being disclosed to third parties.
• Under certain circumstances, the customer can no longer fulfil their tasks, as availability is no longer ensured.
• In the end phase of the termination process, data and systems might no longer be protected adequately, since they are considered to be "old systems".