When negotiating a contract with a computer maintenance management system (CMMS) vendor the guiding principals and definition of the project must first be determined. Deliverables, pricing options, payment terms, continuance, product and service quality, and liabilities are additional areas that must be considered in negotiations.
Many people find negotiating contracts intimidating, regardless of which side of the table you happen to be on. This is understandable given what's at stake—a price, quality of product and service to be provided, and a long-term relationship. As a result, some companies prefer to retain a lawyer, accountant or consultant to help them through the process.
The following are some key elements found in a typical contract with a CMMS vendor. This by no means, however, constitutes a legal opinion. Rather, it provides a basic understanding of what might go into the contract from a technical perspective.
Guiding principles
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Mutual gain: Building a true partnership with your CMMS vendor requires a solid contractual foundation that's fair to both parties. It's too easy to draft terms that favor one party over the other, especially when there are major differences in the size of the companies entering into the contract. A contract, therefore, should allow either party to back out of the relationship at any time and remain whole (value for the customer in exchange for reasonable profit for the vendor).
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Single contract: As much as possible, strive for a single contract, even if multiple vendors are involved. This avoids vendors pointing fingers at each other, while you get caught in the middle lacking satisfactory service.
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Clear roles and responsibilities: What are the expected deliverables from the vendor? What's the timing and at what cost? In turn, make sure the expectations of the vendor are well understood, such as what needs to be completed ahead of implementation.
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Keep it simple: The document should be easy to read and understand. Maintainers are frustrated having to wade through pages and pages of complex legalese.
Definitions
Every contract should begin by defining common terms used throughout the document. For example, "software materials" might be defined as "the XYZ company software in object code and source-code format, and all documents—including but not limited to—specifications, flow charts, diagrams, and user manuals, provided by XYZ company to the supplier under the terms of this contract." The document can then define some of the terms within the first definition.
Deliverables
The contract must specify what goods and services are being purchased. A detailed software specification is usually attached as an appendix. Other deliverables include documentation, hardware, data conversion services, implementation assistance, training, and ongoing support.
It's essential to be as clear as possible in terms of what you've purchased. For example, how many copies of the software did you buy? Which sites within your company can use the software? Can you sell access to the software by suppliers and customers? What type of training comes with the package, for what audience, at which location, for how long, at whose expense?
Pricing options
Price is fundamental to any contract. Some of the more common pricing options include the following:
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Per module, per concurrent user: Some CMMS vendors have adopted this scheme for larger installations. It's the closest thing to paying only for what you use. For example, suppose the vendor charges from $100 to $200 per concurrent user per module. If a maximum of forty users will be logged into the maintenance module at any given time, twenty people working on the inventory control module and four people maximum for the purchasing module—your cost would be 40x$200 + 20x$150 + 4x$100 = $11,400.
When the twenty-first user tries to log into the inventory control module, access is denied and a polite message explains that you've reached the maximum number of users for that module. Some systems will automatically log out a user, if the activity level drops to zero for a pre-determined period of time.
*
Per concurrent user: One of the most popular pricing options is based on the maximum number of users expected to be logged onto the CMMS application at any given time, regardless of which module they're currently using.
*
Per seat: Many CMMS vendors still insist on a per seat charge, regardless of how many users may be running the application concurrently. There may be a volume discount available for companies with a large user base. One difficulty is how much to charge remote users with limited access to the software via the Internet, for example to submit work requests).
source
http://www.technologyevaluation.com/research/articles/maintenance-software-how-to-negotiate-successful-contracts-with-cmms-vendors-17195/
Many people find negotiating contracts intimidating, regardless of which side of the table you happen to be on. This is understandable given what's at stake—a price, quality of product and service to be provided, and a long-term relationship. As a result, some companies prefer to retain a lawyer, accountant or consultant to help them through the process.
The following are some key elements found in a typical contract with a CMMS vendor. This by no means, however, constitutes a legal opinion. Rather, it provides a basic understanding of what might go into the contract from a technical perspective.
Guiding principles
*
Mutual gain: Building a true partnership with your CMMS vendor requires a solid contractual foundation that's fair to both parties. It's too easy to draft terms that favor one party over the other, especially when there are major differences in the size of the companies entering into the contract. A contract, therefore, should allow either party to back out of the relationship at any time and remain whole (value for the customer in exchange for reasonable profit for the vendor).
*
Single contract: As much as possible, strive for a single contract, even if multiple vendors are involved. This avoids vendors pointing fingers at each other, while you get caught in the middle lacking satisfactory service.
*
Clear roles and responsibilities: What are the expected deliverables from the vendor? What's the timing and at what cost? In turn, make sure the expectations of the vendor are well understood, such as what needs to be completed ahead of implementation.
*
Keep it simple: The document should be easy to read and understand. Maintainers are frustrated having to wade through pages and pages of complex legalese.
Definitions
Every contract should begin by defining common terms used throughout the document. For example, "software materials" might be defined as "the XYZ company software in object code and source-code format, and all documents—including but not limited to—specifications, flow charts, diagrams, and user manuals, provided by XYZ company to the supplier under the terms of this contract." The document can then define some of the terms within the first definition.
Deliverables
The contract must specify what goods and services are being purchased. A detailed software specification is usually attached as an appendix. Other deliverables include documentation, hardware, data conversion services, implementation assistance, training, and ongoing support.
It's essential to be as clear as possible in terms of what you've purchased. For example, how many copies of the software did you buy? Which sites within your company can use the software? Can you sell access to the software by suppliers and customers? What type of training comes with the package, for what audience, at which location, for how long, at whose expense?
Pricing options
Price is fundamental to any contract. Some of the more common pricing options include the following:
*
Per module, per concurrent user: Some CMMS vendors have adopted this scheme for larger installations. It's the closest thing to paying only for what you use. For example, suppose the vendor charges from $100 to $200 per concurrent user per module. If a maximum of forty users will be logged into the maintenance module at any given time, twenty people working on the inventory control module and four people maximum for the purchasing module—your cost would be 40x$200 + 20x$150 + 4x$100 = $11,400.
When the twenty-first user tries to log into the inventory control module, access is denied and a polite message explains that you've reached the maximum number of users for that module. Some systems will automatically log out a user, if the activity level drops to zero for a pre-determined period of time.
*
Per concurrent user: One of the most popular pricing options is based on the maximum number of users expected to be logged onto the CMMS application at any given time, regardless of which module they're currently using.
*
Per seat: Many CMMS vendors still insist on a per seat charge, regardless of how many users may be running the application concurrently. There may be a volume discount available for companies with a large user base. One difficulty is how much to charge remote users with limited access to the software via the Internet, for example to submit work requests).
source
http://www.technologyevaluation.com/research/articles/maintenance-software-how-to-negotiate-successful-contracts-with-cmms-vendors-17195/
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