switching costs

Dealing with IT outsourcing vendor lock-in and switching costs requires careful planning and strategy. Vendor lock-in occurs when a company becomes overly dependent on a particular vendor, making it difficult and costly to switch to another provider. To mitigate this risk, businesses can negotiate flexible contracts, create contingency plans, and invest in technologies that promote interoperability. By carefully managing relationships with vendors and prioritizing open standards, companies can minimize the impact of vendor lock-in and reduce switching costs.