Scrutinize Your Multichannel Software Contracts
Usually there’s a software license and maintenance agreement, and a professional services agreement. Both of these need thorough review before signing. The software license agreement defines the terms of the payment schedule, delivery schedule, warranties and remedies, limitation of liability, software maintenance, termination rights, dispute resolution, indemnification, insurance coverage the vendor is required to maintain, and software escrow, among other items that may be specifically related to the vendor’s software.
In addition to the software license agreement, the vendor also will want you to sign a professional services agreement. The most important aspect of this agreement is the statement of work and deliverables. These include modifications, training schedule, conversion and project plans of all tasks that need to be completed, all leading to the targeted “go-live” date. Detail all of these deliverables and have a fully loaded budget for the same. Otherwise, you’re likely to have surprises and cost overruns. Additionally, the professional services agreement should include compensation, expense reimbursement, terms of payment, warranties, indemnification, ownership of any software modification development, integration to other applications and limitation of liability. There may be additional items added to the professional services agreement based on individual company needs.
It’s also important for someone in your organization to be familiar with intellectual properties to review the details. If you don’t have an attorney on staff familiar with intellectual properties law, have these agreements reviewed by an attorney.
Proceed cautiously, allowing enough time for a thorough review of software agreements. Ensure everything is included that the salesperson said would be included for the price. Seek the best possible payment terms for the software license and maintenance agreement, and use pay-for-performance on the professional services agreement.
Paul Sobota is vice president of F. Curtis Barry & Company, a multichannel operations and fulfillment consulting firm with expertise in multichannel systems, warehouse, call center, inventory and benchmarking. Learn more online at http://www.fcbco.com