When It Comes To New Technology Deployments, ‘It's the Contract, Stupid…’

Ken Richard, Ytel |  

Customers crying foul over technology deployments gone awry often ignore the very language that defines the scope of the software offering or implementation. There’s no question about it; software vendors produce innovative products to improve almost any business process in industries spanning from telecom, sales force management, financial accounting, hospitality, human resources... you name it. In this post, we'll be sharing the ways to optimize the sales process and close the expectation gap with any company you're working with via licensing agreements and contracts.

In this post, we'll be sharing the ways to optimize the sales process and close the expectation gap with any company you're working with via licensiving agreements and various contracts.

Having litigated hundreds of failed enterprise software engagements for many vendors and some customers over the past 25 years, I have witnessed a common theme that reveals itself faster than a pop-up ad on a gossip-news site: 

Customers don't pay enough attention to the contracts they're signing, and in many cases, they ignore the very language that defines the scope of the software offering or implementation.

Most licensing agreements for enterprise software and technology have similar language. These disclaimers, warranty and remedies limitations, forum provisions, and integration clauses operate to the advantage of the vendor, not to the licensee. They limit the offering to what’s  documented in the vendor's user manuals, use notes, release notes, and other pre-defined criteria. Off-the-shelf software works the way the software was designed to work (most of the time). However, customers will try to superimpose their business onto the software during the sales process, rather than vet the software in a way that will allow them to understand how it actually works, in order to determine if it’s a good fit for their needs.

What ensues is a train wreck. Here's why:

  • Most customers don't define the functionality they want from the software during the sales process
  • Salespeople do not know, nor care to know, the specific nuances of each customer’s business
  • The complexity of the software and the potential business application is intimidating and can often discourage questions during demonstrations of the technology
  • The customer may assume the software is some sort of magic potion that will let them slash their labor costs, without understanding the dynamics of how the software will operate to get them to that point - including the recognition that some internal processing of the customer will have to change.

With apologies to Paul Simon, "Still, a man hears what he wants to hear. And disregards the rest... nah, nah, nah."

So, what should a customer do? Make an effort to close the "expectation gap" during the sales process:

  • Understand that salespeople don't know your business, its processes, and its nuances. Vendors are there to sell technology features. It’s your responsibility to know your business and what it needs!
  • Before you speak to a vendor, make sure the specific criteria regarding your business processes are clearly defined. It's not the job of the vendor to define those for you.
  • Don't sign any license agreement until you have objectively and definitively determined that the data flow and software work for you.
  • Understand that your processes will change and there will be internal resistance to that change. That's the whole point of acquiring enterprise software, isn't it? You can't impose your business on the software; don't even try.

As mentioned above, the contract defines the relationship between the parties. In 25 years, I've yet to have an opposing counsel call me and say, “Hey Ken, my client is entitled to terminate the agreement and get its money back because the software doesn't function in the way your client describes it on Page 32 of the user manual." That never happens. When conflict and litigation ensue, customers invariably run as far from the contract as they can.

Technology can, if properly vetted before the contract, do wonderful things for a business. But, caveat emptor. Make sure that the technology contracts you sign state what you expect from the product which should lead to drastically reducing the cost, stress, time and effort to streamline your business.

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About The Author

Ken Richard, Ytel

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Ken brings vast software and technology licensing knowledge to the Ytel team. He's represented several public and private Tier 1 software companies in his legal career. Customer service finding solutions to challenges provide the basis for his approach to business.


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