The information provided is based on over 52 years of combined experience in providing legal advice to the IT and outsourcing industries. This expertise includes observing how outsourcing relationships and agreements have evolved to accommodate changes in IT infrastructure, technologies, systems, applications, and business processes.
We examine key areas of focus for customers within outsourcing relationships and how contracts need to adapt. Providers must tailor their contracts to align with customer requirements or respond to customer requests for proposals accordingly.
Before finalizing contracts, it is essential to understand the potential impacts of integrating artificial intelligence (AI) into current applications and licensed platforms. When selecting a provider, their ability to meet your solution needs should be evaluated throughout the diligence phase and reflected in the contract.
To maximize the benefits of AI integration, a strategic and relational approach is recommended, where high-level goals are translated into contractual obligations. Establishing governance mechanisms specific to AI innovation and benefits can help drive successful outcomes.
When determining pricing structures, consider output- and outcomes-based models and incorporate gain share and pain share mechanisms for balanced risk levels. Transitioning away from traditional pricing mechanisms and emphasizing flexibility in change management provisions can facilitate AI deployment.
Legal compliance with existing and upcoming regulations, particularly related to AI, is crucial. Ownership of intellectual property rights, governance of AI-related data, and planning for the continuity of services post-outsourcing should also be addressed in the contract.
Lastly, liability allocation in AI-integrated services should be proportionate and not serve as a deterrent to deployment. As AI continues to evolve in outsourcing, customers and providers must address these key considerations to ensure successful and mutually beneficial partnerships.