Pace Harmon ( offers the following guidance at BPO contract renewal time:

  1. Start Early  Begin contract evaluations 12-18 months prior to their renewal or expiration date to reassess objectives, strategy and overall performance expectations to ensure enough time for evaluating alternative delivery approaches and providers. Identify contract gaps and document improvement opportunities. Develop a recommended framework to engage the incumbent and, if required, other providers.
  2. Assess Delivery Model  Evaluate how effective the current delivery model is at meeting strategic and tactical objectives. If objectives are not being met, determine what needs to be changed to ensure cost savings are delivered, performance is improved, innovation is nurtured, and services are delivered from the best location (e.g., in-house, on-shore, near-shore, off-shore).
  3. Revisit Performance Metrics  While SLA reports may show green, that doesn’t mean there isn’t room for improvement, or that they satisfy business needs. Use this time to assess current performance metrics and understand what is important to your business so you can go into the next round with a precise and detailed view of desired outcomes.
  4. Benchmark Rather than collect benchmark price data, create a tailored Total Cost of Ownership (TCO) model for the desired service delivery model to identify the key negotiation levers (e.g., automation, labor costs, innovation, geography, security, disaster recovery) to drive the outcomes needed to maintain, or improve, your business case.