Preventing Problems with Tec Deals You've Already Closed
You signed your big deal. Be it a SaaS, managed services, or cloud computing deal you're just glad it's over. Next, you pop the corks, thank your tech lawyer for his great work, and send him home. The legal part is mercifully over and now you can get back to business sans lawyers. Sorry, but it's the wrong approach in tech deals, and in fact, in any big deal of any kind. You must keep the team intact and functioning.
Once you sign your agreement, you should begin the process of managing the deal. If you don't manage it, then your vendor will. I would point out that it should be obvious that you may not have overlapping priorities.
It doesn't matter if the deal was custom software modification, implementing a new network for your company, implementing a social network into your operations, an overhaul of your website or whatever. If you manage the project right, you'll maximize the value of whatever it is you bought.
You took the time to put together a team to decide what it is you needed, you evaluated several companies, and you spent time negotiating your deal. One common mistake I see all the time is that at this point many businesses dismantle the deal team because it's "done."
Well, as Yogi Berra said (and if he didn't say it, he should of), "It ain't over til it's over." Don't dismantle the team!
There's no one-size-fits-all formula here, but the idea I'm floating is that your team must stay together throughout the implementation phase. You might need a weekly meeting or just a monthly conference call among your team members, but whatever, you need to manage the process.
You want your team to give you input on issues like "are you getting the service levels required by your agreement?" Are you receiving the required status reports from your vendor? Are they meeting deadlines? In the broadest sense, you want to know if your vendor is complying with the terms of the agreement.
All too often, I see many companies not doing as I suggest here. Rather, they deal with issues like this through crisis management. They tend to be reactive instead of proactive. Only when the situation gets ugly do they reassemble the team and try to reel the vendor back in.
I know that in my role as outside counsel, some of my clients don't take this advice. Once the corks pop, I'm out of it unless and until the parties are staring down the barrel of a rifle. Then, I'm asked to fix it before there's a war.
It should be obvious that it's much harder to fix a problem than prevent it. If your vendor's performance isn't up to what they agreed to provide, it's so much easier to deal with the issue amicably when it's identified in your routine monthly meeting and immediately brought to your vendor's attention (rather then if it's allowed to go on for a lengthy period because nobody is minding your deal).
Beyond the issue of identifying minor problems while they're still minor, another issue is properly documenting the issue in the way required by your agreement. I've litigated too many cases in my almost 20-years as a lawyer where I was up against a contract that says that my client should have sent a written notice of a problem within 15 days and they didn't.
They didn't because while they might have been doing a reactive so-so at best job of managing the business relationship, nobody was minding the legal side. It's asinine when you consider a company jeopardizing any legal remedies it might have in a deal because they didn't want to budget one-hour per month for their tech lawyer to participate in their monthly team meeting by conference call. Crazy.
Moreover, it's not really about "legal remedies." If we're talking about legal remedies, we're talking about a seriously ill deal. Actually, what we're talking about is the concept best said by the cliché, "Good fences make for good neighbors."
As much as you want to have an informal "can't we all just be friends" relationship with your vendor, experience tells me that some level of formality is a good thing. Wait for the relationship to deteriorate before you re-involve your lawyer and an e-mail from me to your vendor is like moving your military to a higher state of alert.
The better approach is that when you notice a minor problem during your first monthly meeting, you have your lawyer send a formal notice as required by the agreement you spent days or weeks negotiating. Now, that same e-mail, and others that follow, are more like a routine diplomatic exchange.
So often, business folks are reticent to send that formal notice. Don't be. It's the procedure everybody agreed to in the agreement, so use it. If you don't, you may unintentionally waive rights you had under the agreement and send the message to the vendor that you'll let things slide.
The right message is we're watching closely, we expect you to do what you said you would do exactly as you said you would-and in return, you'll just love how our progress payments arrive like magic-right on time.