It can take enormous effort to have an IT Contract negotiated, agreed and signed off by everyone. So perhaps it isn’t surprising that a great many organisations – both customers and suppliers – often congratulate themselves on their achievement; breathe a sigh of relief; and stick the documents in a very drawer until it’s about time for renewal or until they hit problems.
Is it any wonder then a recent survey points too more than 30% of company is dissatisfied because of their Service Provider’s performance? Whilst not the many issues may very well be avoided, many could in the event the signed Service Contracts were correctly managed, and subject to once a year health-check.
Of course, they that negotiated anything are unlikely for being the same people to blame for its execution and on-going operation. That means there is certainly ample room for circumstances to “drop between cracks” should the handover from sales to contract management and operations isn’t performed quickly, comprehensively and accurately. IT contract management particularly is a much neglected expertise – nevertheless can be the main difference between success and failure of anything; the visible difference between a mutually beneficial service relationship and also the type of service dissatisfaction that people read about usually.
In a previous article, we viewed major pitfalls to consider in IT Service Contracts. If your contract is definitely signed,as being a starter, listed here are 5 essentials that can help make your IT Contract a shining instance of success:
#1 Success Reward: If you have a motivation scheme for sales (suppliers) or savings (customers), make sure that payments are made above the life of anything and only whether it is achieving the targets what is the best the signing approval was based. [There can be a famous legend of an salesman who collected his substantial “win” bonus and departed an IT service provider just after an important contract was signed – before anyone realised how costly that agreement was going for being to the two supplier plus the customer.]
#2 Continuity: It is absolutely great for the people who are about to manage and execute the agreement to be mixed up in negotiations (at the very least in the latter stages). However, if that does happen, the negotiators must document (in vocabulary) and handover inside a series of internal briefings,
• what has been agreed, particularly in terms on the scope of anything;
• what are planned and expected success measures;
• what decisions/actions happen to be left incomplete;
• what out with the ordinary elements or restrictions are included in anything;
• the alternative agreement or negotiations are actually associated with anything;
• what commitments, timeframes, milestones, deliverables have already been agreed or scheduled.
#3 Governance: How is this contract going to get controlled, managed, and monitored during its operational term? It is extremely hard to stress the key of Governance (and exactly how frequently it can be overlooked or neglected). Ideally this should happen to be agreed as part of anything itself, however if not the framework and personnel need for being in place immediately after signing and some time before the contracted activities commence. Governance is just not limited to meetings (that ought to be short and focused). Many Governance elements must be clear to everyone including for instance,
• that’s performing what role and consider some of the boundaries of the responsibilities and selection authority;
• how disputes are for being handled and what is happens by stage mechanism for resolving such matters before senior executives sign up and without likely to the Law;
• what reports are now being produced when, and who receives them – always making certain that the level of detail is suitable to the recipient;
• how are changes to get handled and implemented – at their operational level along with the financial/contract document level;
• what sort of customer satisfaction level are going to be measured making known;
• how are identified risks being mitigated and ways in which is such risk reduction being monitored;
• how innovations, savings, and initiatives is going to be introduced and considered – and so are such activities an everyday commitment within anything.
#4 Contract Calendar: This is the simplest and a lot under-used tool in anything management armoury. One with the first activities on an IT contract manager would be to set up a diary system containing each of the dates agreed for activities, deliverables, milestones, reports, meetings, invoicing/payments, cancellation periods, notification deadlines, renewals, etc. Of course, simply getting the calendar isn’t much good when it is forgotten or ignored, so automatic reminders are important not just to a single individual (who could be on holiday, sick, and even left this company).
#5 Annual Health-Check: If you don’t check the agreement performance you’ll never know whether it’s successful or otherwise. Whether that check is carried out internally or using external expertise, it has to be independent in the daily contract management and operations and will certainly cover such aspects as Financial Performance, Operational Performance and Contract Performance. It might be true that “if it ain’t broke, don’t remedy it” except for IT contracts “you need to find out if it’s broke” you may fix it before time runs out.
