Four tips for getting the most out of your IT suppliers

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Four tips for getting the most out of your IT suppliers

15 Jul 2015

These days, most businesses live and die by their IT systems.  We all know the feeling when a crucial document you’ve been working on suddenly crashes, or the VPN doesn’t work, or when a new system makes your life just that bit easier.   It usually starts with your IT supplier, and here’s a few tips on how to get the very best out of them:

1. What did you say you wanted again? – A poorly drafted specification is the most common reason why IT systems fail to impress.   Unfortunately, if the contract didn’t clearly say what you wanted it to do, then the scope to claim from your supplier may well be limited. Similarly, suppliers don’t generally want to deliver a disappointing outcome either, and so it really makes sense for the parties to spend some time getting this key document right together, at the outset. Being clear about who, will do what and by when is always a good start!

2. Changing requirements – we all have needs that change over time – whether scaling up or down, carrying out a reorganisation, adopting new ways of working or switching locations. A contract that has been created with change in mind will go a long way to ensuring that it remains relevant throughout the whole relationship, and avoids arguments over money. This might involve a user-friendly change control procedure, an agreed rate card, or perhaps the ability to re-blend service levels to match new customer priorities.

3. Payment for success – where an IT solution requires development work, a common technique is to link payment of lump sums to the delivery of key milestones. For the supplier, this helps them to reduce their cashflow burden during the development phase, and can also enable them to book revenues early against their own financial targets. On the customer side, as long as the delivered milestone is properly tested and accepted (to ensure that they actually receive sufficient value), then this approach can really incentivise the supplier to deliver both successfully, and on time.

4. Plan for goodbye – as with pre-nup agreements, most parties don’t want to invest time planning the end of their relationship. However, a failure to do so usually results in customers being unable to secure the access, transitional support and licence rights they need to seamlessly switch to a new supplier. Also, suppliers can often struggle to walk away cleanly from the relationship, without risking reputational damage in the marketplace.  Far better to at least capture the basics of what will happen on exit, and the relevant charging regime that will apply, so that this is clear in advance.  An exit schedule containing these details is a great tool for this purpose – if properly completed of course!

For further advice on supplier contracts, please contact us or call Martin Lewis on 0161 838 8195

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