Outsource Magazine Issue 26 - (Page 98)

TOP TEN CONTRACTUAL NEEDS The latest in our Top Ten series looks at things to bear in mind when aiming for the perfect contractual framework… Todd Hoffman, Scotiabank Todd Hoffman is a Canadian lawyer and a Director in Scotiabank’s Business Process Outsourcing Group. Scotiabank is one of Canada’s leading financial institutions and has the largest international presence of all Canadian banks. C 98 ●● ● ontracts: we love and we hate them. We love them because they help us achieve our business objectives and we hate them because they can be very difficult to negotiate. The first ten years of my career I worked as a litigation lawyer helping businesses sue each other. The last ten years, I’ve worked in the corporate environment managing large outsourcing contracts. Whether representing a company in court or supporting a line of business, I’ve found that most commercial disputes eventually come down to the contract – either as the cause of the problem or the source of the solution to the problem. When issues arise in an outsourcing relationship, the customer and supplier turn to the contract for guidance. It has been my experience that if an important component of the agreement was not articulated with sufficient clarity during the negotiation process, it will be ten times harder, take ten times longer and cost ten times more to resolve this issue in the middle of the contract term. To help reduce the likelihood of encountering these mid-term disputes, I’ve found it helpful to consider each of the following contractual provisions during the negotiation phase of the outsourcing process. Service Description The service description is the heart of the outsourcing agreement. Each and every component of the contracted service must be set out with sufficient precision to fully document exactly what the supplier is going to do in exchange for the customer’s hard-earned money. A good service description should place the customer in a position where it can say with confidence to the supplier: “You agreed to provide a-b-c-d, but you are only delivering a-c-d”. If the contract does not describe ‘b’ in clear and unequivocal terms, the customer is in a very weak contractual position. 1 “Until the contract is signed, nothing is real.” – Glenn Danzig www.outsourcemagazine.co.uk http://www.outsourcemagazine.co.uk

Table of Contents for the Digital Edition of Outsource Magazine Issue 26

News & Comment
2012 in outsourcing
Fine – but what does it all mean?
Steering Steria
Separate Ways?
Getting Smart
Northern Lights
Heads in the Cloud
Connecting Service
Bigger and Better
NOA Round-Up
Breaking Through
You Cannot be Serious!
Back to the Future
Accounts Payable
The Power of Two
Public-Private Partnerships
Kill or Cure
Public Problems
Top Ten
The Legal View
HfS Research
Online Round-Up
Inside Source
The Last Word

Outsource Magazine Issue 26