An exit strategy is necessary to:
It should be a ‘front end’ activity i.e. considered when developing your commodity/service strategy.
Your exit strategy should be included in the Procurement Documents and contractual terms and conditions where possible. This may appear counterintuitive, but you need a strategy which is consistent with your overall sourcing strategy. Otherwise you risk being locked into an unsatisfactory contract. You may be forced to pay more to stop the contract and minimise operational impact.
If an exit strategy is in place at the start of a supplier relationship, your needs will be included in. the contract. This ensures minimum business and customer disruption if the relationship were terminated.
Exit strategies should be reviewed annually, or when significant change occurs.
There are several considerations to be made when developing an exit plan, including:
Below suggests some factors for consideration. This is not conclusive: each contract / supplier relationship should be considered on its own merits.
An exit strategy should set your service requirements when the parties are transitioning out of the relationship. These requirements may include:
Data privacy and security are critical. The Exit Strategy should consider provision for:
Strict documentation and knowledge transfer contract requirements will be advantageous. Be sure to:
Transition, termination and timing are a key part of the financial aspects of an exit strategy. Be sure the contract:
An exit strategy should cover personnel issues, such as:
Your exist strategy must allow you to terminate a contract during its term where the following occur:
Regulation 73 of the Public Contracts (Scotland) Regulations 2015 requires the above termination grounds to be included as a contract term. If they are not included, they are implied.