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Relevant Training Course / In-house Workshop Highlights:I01 Information Systems / Information Technology Strategy I02 Systems Selection & Implementation The following article deals with best practice Purchasing P01 Modern Procurement Practices
Expert Systems / Tools:25 questions to ask your IT specialist Checklists of functional requirements
Relevant Further Reading: The following further articles were mentioned in this paper:a. Permanently Maintained Website Articles: IS / IT Strategy, software selection and implementation b. Previously Featured Articles from our Archives (Up to 2 per organisation available on request): B007 Purchasing (Do it or Buy it, selecting suppliers, commercial relationships) |
Negotiating Software ContractsThis paper discusses what factors should be taken into account to negotiate the software contract, what targets should be set for the negotiation, and what are the really important long term considerations, that need to be negotiated.
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The Selection ProcessThis is described in IS / IT Strategy, software selection and implementation. It is assumed that you have followed this process up to this point. In particular I am assuming that the buyer has reached this point as a result of a competitive comparison based on a structured statement of requirements, and invitation to tender, followed by a formal proposal, and has checked out referees. The NegotiationProvided you use good purchasing principles in buying software the best deal can be achieved. These include:
In particular you should view all aspects of the proposal as negotiable. I would concentrate on negotiating up support rather than negotiating down the price first. But:
You can use a number of competitive arguments in the negotiation such as:
In a rolling multi-site implementation, other costs and risks can come into play. Longevity and security remain the key parameters for data. Make sure that there is adequate protection in future proofing above in the contract. Finally the technical infrastructure set up can make a significant difference to the operation costs and support requirements particularly in multi-site implementations. The best I have done is to support 108 implementations with 22 people. This included running: implementation support, technical support, help desk, new release testing and implementation, enhancement & modification. If the supplier sees that you intend to be largely self-sufficient, (which you should), he will usually be more accommodating on maintenance costs. A "win / win" situation! _______________________________________________________ Examples of checklists of functional requirements, Utilities (like report writers, enquiry facilities), and other software evaluation criteria, can be supplied on request.(This service is not available to consultants) |
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Whilst great care has been taken to provide relevant, accurate, practical, advice based on our considerable process design and development experience, this will almost certainly require interpretation into the context of your unique business. Please be careful in doing so and if in doubt seek expert advice. We would welcome your feedback!
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