Beware of Minimum Commitments for Outsourcing Contracts

3. The client, rather than the provider, funds any upfront investment necessary for the deal.

4. The customer opens up its strategy book to the supplier, offering insight into future opportunities, business conditions, and other factors that give the vendor confidence in the long term value of the deal.

5. The client offers to go public about the deal, improving the vendor's marketing position, or enlists as an "active referral" for the provider.

In most cases, IT executives will find it in their best interest--and entirely achievable--to steer clear of minimum commitments. Still, there will continue to be circumstances which necessitate minimums, particularly if the vendor makes a significant financial, operational or technical commitment in return for the deal, says Tanowitz.

IT leaders who agree to minimum commitments must remember, as always, the devil is in the details. Watch out for the following customer unfriendly terms that can show up in minimum commitment clauses. If you find them in your contract, read them carefully and understand their implications to your bottom line or negotiate for better terms before you finalize the outsourcing arrangement.