Prior to the Contract Hire outside legal counsel with contract law and software project experience. Demand data on investments in vendors from integrators and consultants who might have conflicts of interest. You have a right to know if their vendor picks are influenced by a financial stake. Demand that the vendor name any subcontractors it plans to use. Ask for references who engaged in similar projects. No references, no deal. Research past and current lawsuits in which the vendor was a participant. Require that the vendor has these insurance policies and that it will cover all damages you may be forced to seek. Commercial General Liability (CGL) Electronic Errors & Omissions (EE&O) Internet liability insurance Hire an independent consultant to analyze specific metrics the project must meet: response times, level of hardware, processing power and so on. Save all correspondence with bidders. Retain reporting and documentation of meetings and interactions. In the Contract Specify the functionality to be delivered. Bad: “Typical CRM functionality” Good: “A system that will amass data on goods sold in retail outlets that is stored in a database for instant and anytime retrieval by marketing personnel for data-mining purposes.” Mandate performance-level testing. “Database must return queries in less than two seconds with 100 concurrent users, under all conditions.” Specify the minimum skill level and amount of staff for the project. Mandate a project plan including: Progress milestones that detail what will function and how. Payment due at each milestone. The specific method by which there will be sign-off on these milestones. Mandate source code escrow and regular audits of the escrow so that you can take possession of source code or other intellectual property if the vendor suffers a disaster or goes bankrupt. Require that all contract provisions apply to subcontractors’ work as if it were the vendor’s own work. Detail a dispute resolution process: Describe specifically when mediation, arbitration and court proceedings will be used. Assign a specific “honest broker” or independent mediator to the project. Mandate a clause that specifies damages allowed in the event of a dispute. State that the vendor’s liability isn’t limited to any specific version of the software used in the project. Don’t sign a contract that limits a vendor’s exposure to lawsuits to, for example, one year after signing. After Signing the Contract Create a warranty that the vendor will address changes to the software as time goes on. Make sure the execution of the contract provisions is sound. Follow through on acceptance tests before signing off on milestones. Confirm that auditing of escrow source code is actually happening and so on. If things go bad: Call in legal counsel. Document everything. Keep the systems online?the best way to prove a system doesn’t work is to show it doesn’t work. Do not talk to the press. Source: CIO reporting Related content brandpost Sponsored by Freshworks When your AI chatbots mess up AI ‘hallucinations’ present significant business risks, but new types of guardrails can keep them from doing serious damage By Paul Gillin Dec 08, 2023 4 mins Generative AI brandpost Sponsored by Dell New research: How IT leaders drive business benefits by accelerating device refresh strategies Security leaders have particular concerns that older devices are more vulnerable to increasingly sophisticated cyber attacks. By Laura McEwan Dec 08, 2023 3 mins Infrastructure Management case study Toyota transforms IT service desk with gen AI To help promote insourcing and quality control, Toyota Motor North America is leveraging generative AI for HR and IT service desk requests. By Thor Olavsrud Dec 08, 2023 7 mins Employee Experience Generative AI ICT Partners feature CSM certification: Costs, requirements, and all you need to know The Certified ScrumMaster (CSM) certification sets the standard for establishing Scrum theory, developing practical applications and rules, and leading teams and stakeholders through the development process. By Moira Alexander Dec 08, 2023 8 mins Certifications IT Skills Project Management Podcasts Videos Resources Events SUBSCRIBE TO OUR NEWSLETTER From our editors straight to your inbox Get started by entering your email address below. Please enter a valid email address Subscribe