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Technology Vendor Contracting: Breaking the Mold

admin — Wed, 09 Sep 2009 00:31:14 +0000

Timothy Nuckles asked:

Commercial buyers of information technology products and services are locked into a self-defeating pattern of behavior when it comes to negotiating contract terms and conditions with technology vendors, and it is time to move on to a better approach. Better technology vendor negotiations produce better contracts for a technology project, and better contracts produce better project outcomes. So, break the mold and move on to a better way of negotiating contract terms and conditions for your next technology project.

Vendor Contracts – Timing Is Everything

Let us assume that by now you have done a lot of planning and information gathering for your proposed technology project, you have completed a vendor selection process, and now it is time to document your deal with your chosen vendor.

At this stage in the technology procurement process, the most common practice—indeed the almost-universal practice—is to distribute the vendor’s proposed contracts to your project team for review and comment. Then, as if by instinct, everyone starts looking for vendor bias in the contracts. No one has been given this specific directive. You simply assume and expect that everyone knows the drill. Folks on your project team begin striking certain biased provisions and scribbling notes about amending others. For sure, removing or limiting vendor bias in the contracts is a worthwhile exercise, but now is not the time to perform this exercise.

Light bulb on

I had to get several technology deals under my belt before I realized this, but at this early stage of the contracting process, you really need to focus first on terms and conditions that are important to you, not the terms and conditions that are important to your vendor. We know your vendor has included in its specimen contracts (as modified prior to presentation to you) all the terms and conditions of your deal that are important to your vendor. In fact, they are very easy to identify. They are all the contract terms with vendor bias. These provisions are so important to your vendor that it has purposely added bias to them, often with obvious exaggeration and redundancy. Even if your vendor has to bargain down somewhat from these provisions, your vendor is still in a safe position because the starting point was so extreme.

What you should do instead

At this initial stage of contracting, you should ignore your vendor’s proposed contracts. Simply set them aside for the time being, and do this for two reasons.

First, in order to express in writing the terms and conditions that are most important to you, you must actually think of what those terms and conditions might be. Likeable as your vendor may be, your vendor will not have already added to its proposed contracts the terms and conditions most important to you for your particular project. You will have to come up with this stuff on your own.

Second, until you know what terms and conditions are most important to you

for your particular project, you are in no position to challenge your vendor’s biased provisions except in attempt to remove or limit the bias. “I don’t know exactly what impact this provision has on our project, but I know it’s not a provision that helps our cause.” Challenging these provisions in a vacuum does not really help you.

The big picture

Now is the time to start with a fresh, big-picture perspective, and then fill in lots of detail. Circle back to earlier stages of your procurement process and revisit your decisions, your assumptions, and the various things you have learned. As a result of your many meetings and discussions, there may be things that you are now taking for granted: special vendor qualifications, how a particular piece of your project will be orchestrated, acutely risky aspects of your project, and so on. Bring to mind other similar projects within your organization and apply what you learned from those experiences.

Re-acquainting yourself with prior thought processes, discoveries, assumptions, and experiences will help you remember aspects of your project that you previously deemed important—whether because they are critical to project success, they pose a substantial risk within your project, or perhaps both—and it will force you to consider the importance of other elements for the first time. This process will help you build out the terms and conditions for your deal that benefit and protect you, terms and conditions that maximize the probability of project success and minimize project risk.

As part of this process, make a detailed list of list of terms and conditions that are important for your particular project, and:

1) Categorize them by subject matter.

For example, requirements development and prioritization, data mapping, business process issues, software development, application integration, database integration, system integration, testing, implementation, buyer protections, vendor management tools, warranties, etc. When you get around to negotiating the items on your list with your vendor, your project team will have important reference points. “Does this contract item touch implementation? If so, let’s look at our implementation items.”

2) Add qualifiers for each item.

Among other things, qualifiers can include a ranking of particular item’s relative importance within your project (critical to project success, represents substantial risk, wish list, etc.). When you get around to negotiating the items on your list with your vendor, your project team will be less inclined to treat all items on your list as equally important. Almost certainly, not all will be equally important. Your team will have a sense of how hard to push on a particular item, and in terms of the give and take that occurs in any negotiation process, they will have sense of what items to compromise (and by how much) or concede outright if met by strong resistance from your vendor.

3) Add relevant notes and comments for each item.

Among other things, relevant notes to attach to your list items include comments about accountability. Who within your project will be accountable for accomplishing the particular item: your vendor, your internal staff, or some combination? And what should happen if the party with accountability drops the ball?

With this kind of list in hand, you are in a much better position to review your vendor’s proposed contracts. Perhaps most important, you are no longer reviewing the contracts in a vacuum. You are equipped to conduct a truly meaningful review of your vendor’s proposed contracts.

Is there a gap in the vendor’s proposed contracts; that is, an item from your list has not been addressed at all? Is there an inaccuracy in the vendor’s proposed contracts; that is, an item is addressed, but its present treatment does not match your understanding, preference or requirement? Are topics within the contracts miscategorized? Are interrelated items not treated as such? Are accountabilities not clearly established?

An even better approach

Although breaking the mold and adopting the above approach to technology vendor contracting will certainly help you produce better contracts for your next technology project, which contracts should facilitate a better project outcome, there is a way to help yourself even further.

Instead of starting with and working from your vendors’ proposed contracts for your next project, think about developing your own standard agreements to include within your technology procurement process (usually at the RFP stage).

First, develop a neutral or somewhat buyer-favorable Software License Agreement. Find a standard Software License Agreement and neutralize or remove the elements of vendor bias. Then add the buyer-side content that you would normally find yourself negotiating with a typical vendor (were you working from the vendor’s standard Software License Agreement). Next, find a standard Consulting Services Agreement and do the same thing.

You can add your newly-developed standard agreements to your next technology RFP and request that responding vendors either approve your standard agreements as-is, or cite alternative language for provisions they do not find acceptable.

By incorporating your standard agreements into your technology procurement process, you will achieve two important things. First, you will be able—probably for the first time—to evaluate vendor candidates based on one of the most important factors for project success, terms and conditions. You can guage a prospective vendors appetite for terms and conditions that are important to your for your particular project BEFORE you have selected a vendor. It is much harder to win favorable terms and conditions AFTER you have selected the vendor for your project. And second, you will greatly reduce negotiation cycle times.

More and more commercial information technology buyers—of all sizes—are using this approach. It may surprise you to learn that many reputable technology vendors will not only entertain the possibility of working from your standard agreements instead of theirs, they may even welcome the prospect because it saves them time and expense as well.

A word of caution

When you develop your own standard agreements, exercise some discipline. Do not convert a terribly vendor-biased agreement into a terribly buyer-biased agreement. This will not help your cause. Instead, shoot for balance. Software developers, for example, have to protect their rights in their intellectual property, and there a certain limits beyond which they will not venture; for example, an excessively broad license grant. Understand vendor limitations and be fair. Add buyer bias judiciously and only if it is truly important to your organization.

Meet Nuckles at http://www.NucklesLaw.com or visit the firm’s sister site at http://www.TechnologyBuyersAdvocate.com.

© 2008 All rights reserved. Olive Consulting Group LLC / Nuckles Law Firm

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Business & Technology ***** – Does Business Drives Technology or Technology Drives Business?

admin — Sun, 16 Aug 2009 07:53:46 +0000

Pervaiz Pyar Ali asked:

Information Technology and the move to a computerized infrastructure model are bringing great changes to many industries. Often it is the CIO of the company who escort this fundamental shift in the business revenue stream. Leading others through modernization, revolutionize and transformation means you must be able to make changes yourself.

Forget about asking whether technology drives business or business drives technology. Stop perturbing about whether or not technology is strategic. Silence all the confusions about how advance this technology is to that technology. In technology, there are numerous questions that if you have to ask, you probably already know and don’t like the answer. A more satisfying line of inquiry is how much of your technological horsepower is actually being used to turn the wheels of innovation.

Some people says that Technology drives business modernization, novelty, success & Innovations that opens up new doors of opportunities, improves the company’s performance on the whole, sharpens the company’s market intelligence, and makes new things possible for the clients. Another school of thought is that the Business Drives Technology, as such integration is about assisting business to facilitate their profitability by utilizing technology and other resources available to the enterprise. But realistically speaking, the driving force comes from the CEO and CIO of the company, who both endeavor to leverage technology to its fullest potential.

In a society that has become entirely dependent on computers and immediate communications, technology is becoming the heartbeat in the process of office design as decisions on layout and services. Some aspects of technology, like the computer animation & communication, are highly visible demonstration devices. But more of it is in the largely unseen infrastructure, with the emphasis on sophisticated wiring and smart communication devices to provide for an ever greater flow, and on communications and power facilities to keep operations running through almost any anticipated calamity.

In the modernization of the today’s businesses, Common business drivers include; Mergers and Acquisitions, Internal Reorganizations, Application and System Consolidation, Inconsistent/Duplicated/Fragmented Data, New Business Strategies, Compliance with Government Regulations, Streamlining Business Processes. To achieve the success in the accommodation of these business drivers, the sturdy and smart input would be required from both the parties i.e. the business as well as the technology.

In a company, you could cover every surface in your office with how to manage change. But one aspect of change management that often dodges IT Managers is how to better influence corporate colleagues. If information technology drives business decisions, the IT executives must communicate and be persuasive with other department heads on key project management issues.

Strategic planning for Information Technology is one component of an overall company vision for success. This psychoanalysis facilitates IT professionals to successfully define short and long-term goals and ascertain the resources necessary to apprehend such goals. To ensure success, the strategic plan should be developed in a thorough but rapid manner, consist of a brief, succinct compilation of analyzed data, and provide opportunities by which additional planning and analysis can occur.

Several important benefits occur as the result of a successful strategic IT plan. First, employees are provided with an understanding of how their role fits in with the overall company structure. Also, this planning allows managers to realize additional opportunities for growth and success. Finally, important relationships between technology investment and positive outcomes, such as increased market share, are revealed.

It’s now become the industry dilemma that IT people need to know more about business. They need to understand the disciplines and the lingo of business process management, business performance management, customer relationship management, supply chain management, financial management, human resources management, operations management, etc. Lacking that knowledge, communication with business people and understanding of business requirements will forever be troubled.

On the other hand the Business people should also drive their efforts to know more about information technology. As with all communication and relationship issues, this is not a prejudiced problem. Just as IT people need to become more business-oriented, business people need to be more IT-oriented. They need to understand the roles and relationships among the many different kinds of technology upon which their information systems depend, and they need to understand the dependencies among those technologies. Business people need to have a working knowledge of the technology stack as it affects their capability to get information, perform business analysis, and make informed business decisions.

Beyond the relatively straight-forward needs of business becoming IT-oriented and technologists becoming business-oriented, there lies a new challenge. We must develop common understanding and shared perspective of value, an issue that is both a business concern and a technology consideration. When business and IT have different meaning and outlook for value, conflicts are certain to arise.

Business and IT organizations often have two evidently different perspectives of value. IT expert generally take a data-to-value approach. Where Data produces information, information enhances knowledge, knowledge drives action, action produces outcomes, and favorable outcomes deliver value. Business management typically uses a goals-to-value system. Business drivers and goals determine strategies, strategies drive tactics, which in turn produce results, and positive results produce value.

Effective business/IT relationships are ultimately a question of alignment. New IT skills, new business skills, and new perspectives that sets the stage for business/IT alignment. But it doesn’t assure alignment. To achieve genuine association there are several things that must be done; some by IT, some by the business, and some collectively.

Conflicts between business and IT organizations have existed from the very beginning of automated Information Systems. We have accelerated in so many ways both in business and in technology. However, the problem still pestilences most of the businesses. The Business/IT ***** must go away. The cost is high; the value is null; and the barriers that it crafts grow bigger each moment. The problem can be fixed, and the time to fix it is now!

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Latest Mobile Communications Technologies

admin — Sun, 09 Aug 2009 17:09:56 +0000

Sarvesh Sharma asked:

From the heavy cordless phones of the 1980′s to the smart phones of today, cellular phone technology has undergone a incredible change. But have you ever wondered how you can call to your well wisher in the whole world with the usage of a mobile phone? You also have knowledge about the main features such as WAP and GPRS from the cell phone vendors and service providers. But you must aware of what they really mean?

There are numerous mobile technologies. So next time, when you are going to purchase a phone, you should know what technologies it has.

Generations of mobile communications

In the late 1970s, the first generation (1G) of mobile communications was introduced; it was primarily used for voice transfer. Second generation (2G) systems came into existence in the early 1990s and was further developed to 2.5G, which includes high technologies such as TDMA, GSM and CDMA. These technologies were used for voice and data.

The next generation of mobile communications is 3G which delivers data speeds from 384 kbps to 2 Mbps and over wireless interfaces such as GSM, TDMA and CDMA.

Mobile phone access technologies

Frequency division multiple access (FDMA)

The first-generation analog mobile access method; for each call, FDMA uses separate frequencies. For instance, if there are four stations, each will receive their own frequency. So there is no interference between them. It reduces interference, but limits the number of users.

Time division multiple access (TDMA)

TDMA allocates unique time slots to each user within each channel, thus allowing many users to access the radio frequency without anyone’s interference. Each mobile conversation uses only a particular frequency slot of the time.

Code division multiple access (CDMA)

Commercially introduced in 1995 by Qualcomm, CDMA quickly became one of the world’s fastest-growing wireless technologies. 3G CDMA networks provide more capacity for voice traffic with high-speed data capabilities, hence many cellular service providers are now building or upgrading to it.

CDMA is used in both 2G and 3G wireless technologies. Indian Cell operators such as Reliance IndiaMobile, TATA Indicom, BSNL and MTNL’s Garuda all use CDMA2000 technology and its variant CDMA1x.

Global system for mobile communications (GSM)

GSM is now the worldwide standard technology for mobile communications. It is developed on TDMA protocol in Europe. GSM provides a high level of security, globally accepted technology standards and superior sound quality.

For any GSM phone to work, it needs a Subscriber Identity Module (SIM), a card which contains your telephone account information. So, an Indian GSM phone can be used in any part of the world.

Wireless technology platforms

1) GPRS

GPRS (General Packet Radio Services) is an enhancement to GSM technology that integrates GSM and IP technology. GPRS offers to access the Internet at the very high speed. So you can check your email on the move and surf the Web at very high speed. Currently BPL Mobile and Hutch (Orange in Mumbai) offer GPRS services in India.

2) WAP

In this high technology age, people on the move need any-time access to the Net. This is where WAP comes in. It facilitates us to Internet access from cell phones. It is an open standard for wireless protocols that is independent of the service providers. The cell phone must have a WAP browser to display Web content. Now-a-days, cell phones often come equipped with WAP browser and GPRS technology.

WAP and GPRS also enable the user to download games, send mail and even transfer your messages to your PC.

3) EDGE

The new EDGE (Enhanced Data GSM Environment) interface has been developed specifically to meet the bandwidth needs of 3G. This technology is promoted by Ericsson, it also offers high-speed data transfers over GSM networks with just a software upgrade to the handset. EDGE technology allows speeds up to 384 kbps.

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Earning a Technology Degree Online Will Accelerate Your Career

admin — Mon, 27 Jul 2009 04:27:42 +0000

Divya Aggarwal asked:

Technology degrees online are the need of the day, study for them while you work. You will not only gain a valuable degree but enhance your career prospects too.

With technology gaining importance in all processes right from acquiring raw materials, manufacturing to selling etc… you need to equip yourself with a technology degree and move ahead in your career. You may be working too and the idea of joining a full time course is not appealing so.. you should check out the technology degrees online offered by many accredited online colleges.

You can opt for technology degrees online depending upon your field and interest. The popular ones being in information technology, communication technology and system engineering. At the same time you could opt for an associate degree, bachelor’s, masters or even doctorates in technology too.

When being taught for technology degrees online, you will be on par with the latest in technology platforms, with constant interactions with distinguished faculties and have to be involved in degree program. As they have flexible schedules and are quite accommodating to your working hours too.

While thinking on those lines, it would be an ideal option if you arm yourself with an Technology MBA program which covers and educates you in important programs such as enterprise strategy, team building, project management which is what is needed at these times for gaining a good job. The technology degrees will be of great value in your resume, accelerate your career and at the same time prove to be very useful in delivering the best out of you.

The University of Phoenix offers a Bachelor’s of Science in Business Program, Master of Business Administration/Technology Management, Doctor of Education in Educational Leadership/Educational Technology, Bachelor of Science in Information Technology/Software Engineering which could be suitable to opt for in case you are from a business background, education background or an Information Technology background respectively.

Similarly the Westwood college Online, offers a host of technology degrees online especially related to Information Technology such as a Bachelor’s in game art and design, bachelor’s in web design and multimedia, a bachelor’s in computer network management.

So, study your options carefully and opt for a technology degree online as soon as possible from an accredited college to move swiftly ahead in your career and earn good money as well.

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