To ensure the best ongoing value from your supplier arrangements, it’s important to carefully assess supplier performance and current market conditions before executing an extension.

Unfortunately, many organisations do not plan in advance for contract renewal and find themselves locked in to extending unsatisfactory arrangements for lack of time to pursue alternatives.

For complex services agreements with a term of 3 to 5 years, assessment of renewal options should commence around midterm. This allows time for proper consideration of the benefits and shortfalls of the existing arrangements in the context of supplier performance to date and changes in market conditions.

A mid-term review may show that:

• The existing supplier and service agreement is largely meeting the organisation’s needs, and only minor renegotiation is required
• The existing supplier is preferred but the services agreement is not meeting organisational needs, in which case a more significant renegotiation and contract alignment is required
• Some early renegotiation is required with the supplier to determine if they can improve performance before deciding whether to formally approaching the market for alternatives
• The existing supplier and service agreement are not and are unlikely to meet the organisation’s needs in the future and a selective or open market test of the services is warranted

Whatever the outcome, conducting a mid-term review allows your organisation the benefit of early intelligence to help support Executive decision making.

ICTS has the expertise and experience to ensure your organisation makes the best choice about your contract renewals.

To find out how we can assist your organisation, contact us today.