Contract Renewal Decision

Renew, change or exit: decide before the notice window closes For contract owners and budget holders who have a renewal coming up Every renewal comes down to one question: is this agreement still worth what it costs, in its current form? You have three answers. Renew as it is, change the scope, price or term, or exit and move to something else. This page helps you get to a recommendation you can explain. Gather usage and value evidence, compare the realistic alternatives, read the notice-window wording in your own agreement, then take the recommendation to the right Finance or Procurement route. Example setting: Northstar Group is a fictional organization, used throughout this page. It is reviewing a fictional analytics service. The names, numbers and outcomes are illustrations, not organizational policy. Worked example: Northstar's analytics service Northstar pays for five workspaces, and only two are in regular use. Both teams rely on the reporting. The sample recommendation is to review a smaller package before agreeing to a straight renewal. It is neither a default renewal nor an exit. Fit with current usage (sample: 2 of 5 workspaces active in the last 90 days) Three workspaces paid for but unused Covers the two active workspaces plus one spare Value to the people who use it (sample check with 14 users) Reporting rated useful by both active teams Same reporting retained Illustrative annual cost $48,000 $33,000 (indicative figure, not a confirmed quote) Alternatives considered None needed Vendor's smaller tier; one competing tool still to be assessed Notice window Read the agreement's wording before relying on any date Check whether a package change must be requested before the window closes Main risk Another term of paying for capacity nobody uses A fourth team needing its own workspace would exceed the smaller package; the third uses the stated spare. Questions that point to renew, change or exit Use these as prompts for your recommendation, not as rules. Your agreement and your organization's process decide what is possible. Lean toward renewing when the need and value are both evidenced People used it regularly in the last term, you can name the outcome it supports, and the price and terms still look reasonable against your alternatives. Record the usage evidence so the recommendation can be checked. Explore a change when the need exists but the shape no longer fits Examples are paid-for seats nobody uses, a feature tier you have outgrown, a term that is too long for a service you may replace, or a price that has drifted from the value. Ask what you could do differently and what that would cost. Assess an exit when the need has ended or a viable replacement exists Name who still depends on the service, where the data or files will go, and who will handle the move. An exit with no transition plan can cost more than a renewal. Pause and ask for specialist input when the facts are unclear Examples are unclear usage, an unusual clause, a material change in scope, or a dependency on other teams. Raise it early, while the notice window is still open. Common questions We are not sure how much the service is really used. What counts as evidence? Use what you can observe: login or usage reports from the supplier, the number of people or teams who actually rely on it, or a short check with the main users. Note the time period you looked at and how many people you asked. A rough but dated figure is more useful than a guess. How do I compare alternatives without running a full tender? Start with a short comparison, such as the supplier's smaller or different package, one or two other products people have mentioned, and doing without. For each, note the cost, what you would lose, and what it would take to switch. If a real change looks likely, ask Procurement how your organization handles sourcing. Where do I find the notice window? Read your own agreement. Look for the renewal or term section and any wording about notice of non-renewal or changes. This page does not state any dates, so do not use a deadline from another contract. If the wording is unclear, ask your contract or legal support route to interpret it. Do not guess. What if the notice window is close and I do not yet have a recommendation? Tell Finance or Procurement now, with what you know so far. Say that a decision is pending and share the agreement wording. Letting the window pass by default is the outcome this page exists to prevent. When should a contract or legal specialist be involved? Involve one when the notice wording is ambiguous, when you want to change the terms materially, when you plan to exit and the agreement has obligations that continue after the end, or when your organization's process requires it. You do not need a specialist for a straightforward usage and value review. A decision route you can follow Work through these in order. Each step produces something you can share with Finance or Procurement. Gather usage and cost context Record what you pay, what you get, who uses it, and the period you measured. Keep the source of each number, such as a supplier report or a user check. Write down the realistic alternatives List a smaller or different package, a competing option and doing without. Add a note on dependencies, such as other teams, data and integrations. Read the notice wording in your agreement Copy the exact renewal and notice wording into your notes and mark any part you are unsure of. Do not rely on a date remembered from a past term. Draft your recommendation State renew, change or exit in one sentence. Add two or three facts that support it and the risk you are accepting. Send it through the established route Share the recommendation and its evidence with the Finance or Procurement contact for your area. Ask for contract or legal support if the wording or terms need interpretation. What to bring to Finance and Procurement Bring these items so the conversation can start from facts instead of questions: The agreement, or its renewal and notice sections The renewal and notice wording you found, with any parts you are unsure of marked Your usage evidence, with the time period and where each number came from Your alternatives list, with approximate costs Your one-sentence recommendation and the main risk of acting on it This page is a decision aid. It is not an approval, a submission or a record of one. Your organization's Finance and Procurement process determines who approves a renewal, change or exit and how it is recorded.