ERP Negotiation Advice: How To Get A Good Contract

ERP negotiation contract

Last week, we talked extensively about ERP basics. We touched on package selection. Likewise, you received several ERP negotiation tips. However, the latter focused mainly on skills.

Today, we’re going a bit more in-depth. Our focus will be the contractual side of the negotiation. You’ll learn how to set your contract’s pillars. Naturally, we’ll go back to the NBS package selection guidelines.

As usual, we can also help you find the best software. Don’t forget to book your free meeting today!

ERP negotiation fundamentals

Now, let’s begin with the basics. Your vendor contract states every promise. The same holds for the customer agreements. Therefore, drafting and reviewing is fundamental. Most importantly, ensure you don’t leave room for interpretation.

I’ll summarize the article’s observations. However, check it out for more details.

Work statement

Firstly, we have the contract’s core. This work statement describes what to expect from the contractor. For starters, agree on the system’s specs and features. The package’s modules are crucial. Overall, specify the service entirely.

That’s true for the vendor and implementation partner.

Performance guarantee

Secondly, you must state support and warranties. For instance, package fixes are crucial for ERP solutions. Repairs, modifications, and upgrades are part of the contract. You must also state who’s responsible for them.

Compensation and rights

Lastly, clarify entitlements for the vendor. This area mostly relates to prices and payment terms. The former relates to package, mods, and service pricing. Itemize each one separately. Moreover, state the payments’ schedule and conditions.

ERP negotiation miscellanies

On the other hand, we have more subjective terms. We say “subjective” because of their variation. They’ll differ depending on the software, vendor, and client. Nevertheless, they demand clarification.

Cancellation

The first step is cancellation. Typically, both parties in the agreement can cancel the contract. That said, the agreement must state which conditions allow it. Furthermore, timely notifications must be a requirement.

Waivers

Conversely, waivers are simpler. They state circumstances that nullify these terms. Regardless, don’t cut details. While straightforward, waivers require lots of care. They’re a safety net for both contract parties.

Ownership

Today, most solutions aren’t for purchase. Instead, they use a licensing model. That means clients don’t own the software. Multiple questions are crucial here. License terms are vital. They also include revoking, renewing, and transferring.

Proprietary information

For ERP software, company data is vital. As such, confidential information demands attention. State which information the vendor can access. Additionally, the contract must prohibit revealing said information.

The future

Future performance, renewal, and contingencies go into the contract. Clarify who’s responsible for product support. Similarly, specify renewal eligibility. Contingencies affecting the contract’s performance are the same. Consider the worst scenarios and agree on them.

Topics:

Zero Point ERP Solutions

Subscribe to our Newsletter

Share to

Recent Post

NetSuite Best Practices for Retail Businesses

NetSuite Best Practices for Retail Businesses

Read more

NetSuite vs. SAP S/4HANA: Which One Is Better?

NetSuite vs. SAP S/4HANA: Which One Is Better?

Read more

SAP Data Intelligence Moves Enterprise Businesses Forward

SAP Data Intelligence Moves Enterprise Businesses Forward

Read more

SAP S/4HANA Trial Systems: Discovering It’s Potential

SAP S/4HANA Trial Systems: Discovering It’s Potential

Read more
Share to