Pulte Homes Inc., a US$12 billion homebuilder in Bloomfield Hills, Mich., has a contract with Siebel Systems Inc., which was recently acquired by Oracle Corp., for Siebel's CRM On-Demand services. "But we didn't go after it for the cost savings," says Jerry Batt, CIO at Pulte.

Batt compares the economics of contracting with an MSP to those of leasing a new automobile instead of buying it. "The cash outlay overall is more if you lease, but you have upfront costs if you buy," he says. In contracting for a service, Pulte obtained the latest and most sophisticated technology right away at a much lower upfront cost than it would have incurred had it bought and built its own CRM system, Batt notes.

TPI's Slavin says customers shouldn't consider MSP services in terms of potential cost savings anyway. "There's not a straight-up IT cost savings, because the MSP is usually providing some service that the current internal IT infrastructure couldn't have done," he says. It's more about results, such as gaining access to a new customer set, expanding your business or reducing your time to market, he says.

5. What's the exit strategy?

Whirlpool's Luersman recommends that users take particular care in working out this part of an MSP contract. She also recommends building very specific timelines and details into the contract upfront. For example, if Whirlpool has a fluctuation in its employee head count or needs to change a business process as a result of an acquisition, Convergys has a 60-day window to work through and change all of the services it provides.