Global Outsourcing Industry Converges on New Center Points for Selected Contracting Terms.

TPI Collaboration with Industry Leaders Offers Guidance for Successful Contract Negotiation Strategies

HOUSTON -- TPI, the world's leading advisor to global corporations on all facets of service strategies for business support operations, today announced the completion of the first of four evolutionary innovation initiatives for the global outsourcing industry.

TPI has unequalled access to the range of complex and inter-related contracting terms that result from negotiations between corporations that are buyers and the industry's leading service providers. In response to feedback from participants on sourcing services buying and selling sides, the company is publishing guidelines to the industry on the current state of "center points" for certain contracting terms.

The categories of guidance offered via TPI's recommended Terms & Conditions Center Points document, available at http://www.tpi.net/knowledgecenter/innovationagenda/, include:

-- Services definition
-- "New services" definition
-- Service levels
-- Post-contract true-ups
-- Cost of required consents
-- Accountability for managed third parties
-- Termination for convenience
-- Intellectual property leave-behind rights post-termination
-- Approval rights to move service locations

TPI will report shortly on the remaining three core Innovation Agenda items.

"We have found that the art of negotiating successful outsourcing agreements depends largely on the parties' confidence level that the business terms that frame the agreements reflect prevailing market conditions regarding rights, responsibilities, and remedies," said Chris Kalnik, partner and chief knowledge officer at TPI. "Success is measured by both client and service provider Co with each party able to achieve its business objectives through sound commercial practices, which include incentives for mutual success."

In an effort to refresh and enhance some of the more essential and complex aspects of outsourcing contracting, TPI launched four collaborative "Innovation Agenda" initiatives earlier this year, reflecting the input of outsourcing clients, service providers and lawyers. The other initiatives comprising TPI's 2006 Innovation Agenda include gainsharing and business value metrics; benchmarking; change management; and redefining essential contracting terms and conditions.

"The clients of outsourcing relationships impressed upon us the importance of the sourcing industry continually improving the process through which contracting agreements are reached and the attendant facilities through which value creation accrues to both client and service provider in appropriate proportions," offered Peter Allen, partner for market development at TPI. "The topics addressed by our Innovation Agenda will materially enhance the process through which outsourcing agreements take shape along with the nurturing of long-term relationships through better alignment on the core objectives of the parties."

With the trends evident in the global outsourcing industry indicating shorter-duration contracts, multi-sourcing, and offshoring, TPI believes that enterprises must adopt more efficient and fact-based techniques for the evaluation of outsourcing alternatives. The publication of common center points for more seminal contracting terms is intended to help the parties to a prospective outsourcing agreement better understand the current state of the marketplace.

"The outsourcing negotiation process is a complex, multi-dimensional journey aimed at achieving balance between the parties," said Kalnik. "While client circumstances should inform 'industry standards' for individual contracting terms, there are some notable 'ending positions' prevalent across today's outsourcing relationships."

About TPI

TPI is the sourcing advisory industry founder, and the largest advisory firm in the world focused on a broad range of business support functions and related research methodologies. Applying deep functional domain expertise of accomplished industry experts who possess extensive practical experience, TPI collaboratively works with organizations to help them optimize their business operations through the best combination of insourcing, offshoring, shared services and outsourcing.

For additional information, visit www.tpi.net.