Contracts for the supply of software and services can vary greatly from other commercial contracts in many ways. Key areas to consider include how best you can secure protection for your business, especially during delivery and implementation (which can be a tricky time), how you can obtain the highest ongoing service levels from your chosen vendor and what future costs you may be liable for.
Before we notify the preferred ERP supplier that we have selected their solution, there are few important steps.
1. Check that all outstanding issues from the ITT response and demonstrations have been satisfactorily addressed. They can often be overlooked and it can be much more difficult after you have signed the contract and that is often where unexpected additional costs can emerge. (“I thought it was included!”)
2. Where the supplier has proposed that there are software modifications or bespoke development needed to meet you requirements then they must provide functional specifications and price quotations. The functional specifications must clearly meet you requirements and meet any cost-benefit criteria. Don’t just rely on what they said in the demo!
3. Packaged software often grows in functionality through incorporating customer “new” requirements as part of the standard product in the next release. I have often been able to reach an agreement with the supplier that they should absorb the cost or at least share the development costs. Again, this must be done before you sign a contract.
4. Where software is to be installed on your in-house server then it is normal to pay an annual fee for support and software maintenance. An annual charge of 20% of the Software package price is typical. This means you will pay for the software twice over 5 years. Maintenance charges for bespoke development can attract a higher % so this is where successful negotiation (see 3 above) can save even more. Finally it is often possible to negotiate a 5 years for the price of 4 if paid up front. Charges for cloud solutions vary.
5. If at all possible negotiate stage payments that reflect the implementation stages.
Before signing the contract you should expect the successful supplier to agree that their response to the ITT and all other specifications and quotations are attached to, and forms part of the contract. After all that is what they are signing up to deliver and what you are agreeing to buy.
If you would like more information on Barry’s process for specifying and selecting an ERP system, please contact Barry. If you are interested in finding an ERP system for your business, you can find more information on what E-Max ERP offers by speaking to one of our team, contacting us or on our website here. Of course, if you’re ready for a demonstration of E-Max ERP in action, then you can arrange a demo at a time convenient to you.