The Procurement Glossary » Exit Plan
Exit Plan
Contracts & Legal
Definition
A pre-agreed plan for winding down a supplier relationship smoothly, covering handover, data and continuity of supply.
Explanation
An exit plan reduces the risk of being trapped with an underperforming or failing supplier. It covers transition assistance, data return, knowledge transfer and timelines, and is especially important for outsourced services.
Example
The outsourcing contract's exit plan requires the supplier to transfer data and support a 90-day handover to a successor.
Related terms
- Termination for Cause — Ending a contract because the other party has materially breached it, usually after a chance to remedy the breach.
- Vendor Lock-In — A situation where switching away from a supplier is difficult or costly, reducing the buyer's leverage and choice.
- Business Continuity Planning (BCP) — Planning to keep critical operations running, or recover them quickly, when disruption strikes.
- Outsourcing — Contracting an external supplier to perform a function or produce goods that could otherwise be done in-house.
Frequently Asked Questions
What is Exit Plan?
A pre-agreed plan for winding down a supplier relationship smoothly, covering handover, data and continuity of supply. An exit plan reduces the risk of being trapped with an underperforming or failing supplier. It covers transition assistance, data return, knowledge transfer and timelines, and is especially important for outsourced services.
Can you give an example of Exit Plan?
The outsourcing contract's exit plan requires the supplier to transfer data and support a 90-day handover to a successor.
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