1. We Need to Talk. "The one thing that is relatively certain when a customer falls to the bottom 10% of a vendor's portfolio is that the vendors will not be shy about letting them know," says Steve Martin, partner with outsourcing consultancy Pace Harmon. "In these problem scenarios, a provider's first course of action is generally to voice their concerns to their customers and attempt to propose remedies through the standard governance process, rather than immediately developing subtle termination plots. They may also attempt to renegotiate the deal or work through critical issues in executive-level meetings."
2. Death by Change Order. Watch out for a provider that's getting hyper-technical about what is included in the scope of the contract, says Edward Hansen, partner with law firm Baker & McKenzie. Even clauses intended to address scope-related issues, like a "sweeps clause", intended to enable the buyer include within the contract scope additional services that are incidental or inherent to those laid out in the statement of work, "just seem to stop working when the vendor gets into economic trouble," Hansen says. )
"'Death by change order' is a telltale sign that they've fallen out of love with their customer," says Pace Harmon's Martin, partner with outsourcing consultancy Pace Harmon. A weary vendor might also refuse to respond to new technology requests or other scope expansions, until another portion of the existing deal is "fixed" or "addressed," says Strichman of Sanda Partners,
3. No Sale. If the outsourcer is making few attempts to sell more work, upsell services or develop a long-term roadmap, chances are the vendor wants out, says KPMG's Lepeak. "All leading service providers today are focused on growing business in existing accounts," Lepeak says. "It's cheaper and more efficient from a sales standpoint, creates a more sticky relationship, and often creates opportunities to get involved with more strategic work." According to the most recent KPMG Sourcing Pulse survey, 80% of IT service providers said that are pushing hard to expand the scope of current accounts.
4. Send in the Lawyers. Provider counsel may chime in occasionally on even the best deal. But when they're suddenly omnipresent, even on the smallest issues, "you know there's a problem," says Strichman of Sanda Partners.