DrewTech Series Chapter 1: The Importance of an Exit Strategy in Technology Contracts
06 Mar 2019
This update discusses the importance of corporations planning an exit strategy when engaging enterprise technology services providers and highlights the risk of not investing enough time on this issue, even though it may be counter-intuitive to be thinking of an exit to the relationship even before the relationship has begun.
The role played by Chief Information Officers (“CIOs”) is critical when planning an exit strategy. CIOs are not only key to managing the expectations of the business as to the limits and capabilities of technology, but the business will also look to CIOs to ensure that their significant investment in technology is exploited for the best possible benefits of the business and customized to business needs as far as possible. This role extends to when there is a need to switch service providers. This can be due to a variety of factors such as better available technology, a change in reputational risk or changes in the regulatory environment or accreditation. When this need arises, the issues to be considered include continuing service requirements, data security and privacy, knowledge and documentation transfer and the costs of transition. A good exit strategy will not only cover these issues and others but also guard against the risk of enterprise data being held to ransom by a service provider in the event of a breakdown in the relationship.
Please click here to read the update.