The Vital Role of Contract Review in Auto-Renewing IT Service Contracts

IT service contracts have grown in prevalence in recent years as the needs of businesses have only grown more complex. While partnering with IT service providers and advisors is extremely helpful, you should always be sure you’re getting the best bang for your buck. This means taking the time to review your auto-renewed IT service contract every time it is up for auto-renewal, even if you are perfectly happy with your provider. The following seven tips and review points will help ensure you are getting the most out of your contract:

1. Ensure Alignment with Your Evolving Needs

The first and perhaps most obvious tip is to reevaluate the specific needs of your IT services contract. As a business grows and evolves over time, the IT infrastructure may need to evolve with it. This means that what worked for your business when you first partnered with your provider may not be adequate enough now. A contract renewal is the perfect time to consider upgrading, or even downgrading, certain features in your contract.

2. Clarify Service Level Agreements (SLAs) and Performance Metrics

A contract auto-renewal is also an excellent time to review the terms of your service level agreements and to review past performance metrics. If you haven’t been altogether satisfied with the service you have received, this can serve as a talking point with your provider or even motivation to find a new one.

3. Evaluate Pricing and Cost Structures

Naturally, all businesses want to receive the best price possible when working with a third-party IT provider. Depending on when you signed up with the provider in the past, there may be certain specials offered that you can take advantage of that you would otherwise miss if your contract renewed automatically at the same rate.

4. Assess Security and Compliance Requirements

In the tech industry, security and compliance requirements and regulations are constantly changing. Regardless of the industry you are in, take the time to stay up to date on all security and compliance metrics to ensure you are adhering to them. When your contract is about to auto-renew, double-check that everything you’re getting from your provider covers the gamut of regulatory requirements. If it does not, you will need to consider either changing providers or upgrading to a new contract that does meet the necessary requirements.

5. Understand your Incident Response, System Breach, and Disaster Recovery Commitments

All organizations are targeted by malicious activity, and industry trends show that the likelihood of a successful attack are growing for all businesses. Most IT Service contracts include prevention and detection systems. However, a common contract gap is commitments and expectations when responding to a breach. Critical components include knowing the capabilities and cost of emergency technical expertise, identifying who will take part in critical recovery decision-making, and planning the integration of executive oversight, legal advisory, and crisis communication management with an IT provider. Understanding the ins and outs of your contract terms for incident response, system breaches, and disaster recovery is a key to managing the inevitable risks for any company.

6. Identify Termination and Transition Procedures to Mitigate Vendor Lock-in

Sometimes, when contracts are up for auto-renewal, small issues in the terms will go under the radar. One such issue is being locked into your contract for the length of it. Be sure that there is a termination clause as well as a transition procedure in your contract so that you can have the freedom to leave at any time if the service is no longer right for you. It’s important to be aware that there will likely be penalties in monetary form for canceling early, but the crucial thing is to have the option to cancel at all.

7. Safeguard Intellectual Property and Ownership Rights

When IT providers work with the data your organization collects, distributes, utilizes, and more, they typically have to store it for a certain amount of time to be able to work with it. Naturally, there is likely plenty of proprietary information within that data. Be sure that your contract covers your intellectual property and asserts that the IT provider is only managing your data rather than being the owner of that data.

8. Strengthen Vendor Accountability and Service Quality

Building off of one of the prior points, an auto-renewal is an excellent time to speak with your vendor about accountability and the quality of service you have received so far. Take this moment as an opportunity to bring up any gripes, concerns, or compliments you may have for the provider. This feedback can open the door to modifying your contract in certain ways, which may bring about more benefits in the long run.

Inspect the details of your contract renewal today

The last thing any business should do is allow their IT service contract to auto-renew without even taking a second glance at it. An auto-renewal, even for the best contracts, can serve as a great moment to review your terms, tighten up on pricing, and address any past issues you may have had. For those with a business located in the Akron, Columbus, or Cleveland areas and in need of general IT assistance or partners, reach out to us at Warwick right away. Our expertise in both the cloud computing and IT infrastructure space means we can advise you on the best course of action for protecting your business while also being a trusted partner.