Exit plan

Definition

An exit plan is the operational document, usually required by an exit clause, that sets out the concrete steps, timelines, responsibilities and deliverables for transitioning a service to a successor supplier or back to the client. It typically covers knowledge transfer, data migration, return of equipment, decommissioning, and acceptance criteria. Keeping an up-to-date exit plan throughout the term reduces disruption and dependency risk at termination.

Example

The parties review the exit plan annually so that, on termination, the data migration can start within two weeks.

Why this is a business risk

An exit plan that is never updated becomes worthless: systems, staff, and data structures change over the term, and an out-of-date plan at the point of exit causes transition delays and disputes about what is owed. Without a working exit plan, a customer's operational dependence on the supplier grows unchecked, turning what should be a planned handover into an emergency.

How to manage it

• Require the exit plan to be drafted within the first three months of the contract and updated at least annually.
• Include acceptance criteria in the plan so both parties agree on what constitutes a completed handover.
• Test the plan periodically with a dry run or walkthrough to confirm it remains feasible.
• Link the exit plan to the contract's expiry or early-termination milestone so it is reviewed before exit is triggered.