How to Mitigate the Challenges faced during Vendor to Vendor Transitions?

In my last article I talked about the Challenges faced during a Vendor to Vendor transitions in IT Outsourcing engagements.

In this article I will talk about a few strategies to mitigate the risk stated in my previous article. These strategies can vary from case to case basis, but I will talk about some generic strategies.

According to the various sources, a successful transition from one vendor to another vendor can take 2-3 months. The more the complex environment, the longer it will take for the transition to be completed. Also, the current state of the environment can also impact the duration of the transition. If the customer has a mature environment with all the process well defined and properly documented, it can take lesser time for transition to be completed.

In addition to the time needed for the project transition, there are some challenges and ways to mitigate them that one should be aware of when switching vendors:

Outgoing Team's lack of co-operation in sharing knowledge and Passing of incomplete and incoherent information to the incoming team. In most cases, the outgoing vendor is not contractually obliged to support the incoming provider. So, the customer will have to act as a mediator, taking care of the knowledge transfer from one vendor to another. Alternatively, the customer can put a monetary reward in place at the early phases of transition management to spark the interest of the leaving party to mitigate the loss of project knowledge.

IPR Issues and Confusing Ownership of the resources. Upon the termination or the completion of the contract, the outgoing provider must transfer all assets. However, there is no way to verify if every one of the outgoing vendor’s employees deleted the files related to the current project. The only thing that can be done is to make sure there is an NDA (Non-Disclosure Agreement) in place, so that charges can be pressed in case of leaks.

Business Disruption. In the last weeks of project, after the customer has announced their plans to terminate the incumbent’s cooperation, the incumbent vendor can reassign their resources to another project, or the resources themselves can lose motivation. There is little that can be done about this. Just make sure to minimize the disruption for the most vital business processes.

No transition or exit plan in the service agreements. Once the new vendor is selected and MSA (Master Service Agreements) are signed, ensure that there is a proper transition or exit plan defined, which makes the incumbent contractually cooperate during the transition period or during their exit.

Loss of Process Knowledge of the company over time and Proper Ownership of transition activities and service delivery not defined.  In multiple cases, while outsourcing the customer losses process knowledge over time as he is entirely dependent on the vendor. This makes him vulnerable during the incumbent vendor’s exit as he has very little knowledge about the processes. The customer should ensure that a proper RACI matrix is defined, and a resource is always aligned to overlook the project to make sure the customer always has an upper hand.