negotiating software contracts

8/11/2019 Negotiating Software Contracts

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Negotiating a Software Contracts

Basanta Chapagain

MCA- 3rd

Semester


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Topic to cover

Introduction

Point to consider when negotiating contract

Steps of Software Contract Negotiation

Special negotiation issues


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Software contract negotiation

Software contract negotiation involves the process of discussing andcompromising on contract terms in order to reach final approved draftof a contract!

Main goal of contract negotiation is to ma"e an agreement that will #e

#eneficial to all involved parties! Contract negotiation process often involves upper level management

who have e$perience and authorit% to ma"e a decision a#outcontracts!& Some software companies have separate Contractnegotiation team' !

(inal goal is arrangement that is #oth fair and e)uita#le to eachpart%!


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Point to consider when negotiating contract

Specification and delivera#les

*eliver% schedule

Pa%ment terms

Testing and acceptance Support and maintenance & warranties'

*ocumentation

Software Modification

Scope of license

Termination of agreement


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Point to consider when negotiating contracts

Confidentialit%

Patent and cop%right

+is" of loss

Insurance


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Contract negotiation steps

Preparation

Conduct a ris" anal%sis

*evelop the negotiation strateg%

Assign negotiation team and roles Conduct Negotiation


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Preparation

,e%s area of preparation include

nderstand the #usiness need

nderstand the mar"etplace

Contact customer references

These steps ma% have #een performed earlier in theprocurement phase #ut revisiting them at this stage

will help in developing clear and complete negotiation


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Conduct a ris" anal%sis

Identif% potential pro.ect ris"s #ased on the selected proposals and+(P&re)uest for proposal' re)uirement!

Prepare &ris" mitigation wor"sheet' which provides a valua#le tool forensuring a comprehensive loo" at possi#le pro.ect ris" area to

negotiate around!
http://scm_chapter26.xls/#risk%20mitigation%20worksheethttp://scm_chapter26.xls/#risk%20mitigation%20worksheet


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*evelop the negotiation strateg%

Bring the completed ris" anal%sis into the negotiation strateg%!

*etermine final scope/functionalit%

Confirm ma$imum #udget

Identif% those element of the +(P and selected proposal onwhich %ou can afford some degree of negotiation fle$i#ilit% andthose on which %ou can not!

*efine non-negotia#le negotia#le factor&proposed vs target'!

Prepare &Negotiation strateg% wor"sheet'
http://scm_chapter26.xls/#Negotiation%20strategy%20worksheethttp://scm_chapter26.xls/#Negotiation%20strategy%20worksheet


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Assign negotiation team and roles

T%pical roles includes following

The SP0C&single point of contract ' will communicatewith supplier&S' and ma"e all agreements!

The #usiness lead will represent the pro.ect1s #usinessneeds!

The technical lead will represent the pro.ects technicalneeds!

The legal e$pert will validate legalit% of the agreements


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Conducting Negotiations

0nce the preparation ris" anal%sis negotiation strateg% andassignment of roles are complete it is time to enter into negotiations!

There are some common practices that should #e followed

Prepare an agenda for the meeting !

Negotiating with the right people!

Avoid )uic" and hurried negotiations

Confirms all re)uirements e$pectations!

se the agenc%1s approved contract form

se consistent terminolog%

2oc" down the scope of the wor" to #e perfromed

Strive for a win-win4 negotiation outcome!


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Software licensing negotiations

+ights to use/access and use/access restrictions

*efinition of the parties entering into the licensing arrangement

Accurate definition of software to #e licensed

0perating s%stem and versions supported

Source code availa#ilit%

+ights to modif%

5arrant% period

+ight to cop% and distri#utes

Acceptance criteria definations


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Technolog% pricing negotiations

6ardware

Software

Services Telicommunications


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7uestions8888


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Than" 9ou

negotiating software contracts

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