The outsourcing of IT services as an instrument for increasing IT efficiency has been in use in many companies since the 1990s. Nowadays, one would be hard-pressed to find a company which has not either had its own experience with outsourcing or at least examined the possibility of taking the outsourcing step. As a consequence in the next few years, the IT outsourcing market will be increasingly characterized by the re-tendering to submit new bids as the 1st generation outsourcing agreements expire.

When an existing outsourcing agreement is extended or ­becomes the subject of an invitation to submit new bids, we speak of 2nd generation outsourcing.

From the company‘s point of view, there are three major ­questions which arise during the transition from 1st to 2nd generation outsourcing:

• How should the new outsourcing relationship be designed?

• Who will perform the IT services in the future?

• How can the transition from the old to the new outsourcing agreement be achieved with optimal results?

2nd generation outsourcing lifecycle offers fundamental procedures

The experience of the first outsourcing agreement is taken into account when considering the desired terms and conditions for professionally managed 2nd generation outsourcing. However, the structures in the current agreement do not necessarily play a role. On the contrary, there is an opportunity to redesign IT structures and IT services to the changes in needs and business requirements of the company.

Unlike the first awarding of a contract to third parties, which aimed the minimization of costs for a specific range of services, the subsequent agreements concentrate on generating additional value and supporting the company‘s strategic goals by making completely new processes possible or improving efficiency in the performance of IT services, to mention two examples.

During the 2nd generation outsourcing lifecycle, IT is reviewed holistically and oriented to the strategic corporate goals (see Figure).