Most Read Contributor in South Africa, September 2016
ICT Projects present any business with a number of challenges.
Apart from the risk of money, value and time, what are the other
risks? A failure to negotiate and put in place a contractual
framework is a risk that often leads to an increase in fees and
expenses. Contractual framework is important as this naturally sets
forth the foundation and includes the rights and limitations for
each party. A strong framework should typically include mechanisms
to limit and control the costs, along with mechanisms to ensure the
project is delivered on time and within scope.
Weak project management mechanisms can also be easily managed
through the contractual framework, namely, each party's roles
and responsibilities can be clearly set forth. Project meetings and
the composition of the reports should be clearly documented to
avoid any confusion, and the technologies limitations should also
clearly be set out in the framework, as this will ensure that both
the commercial and technology stakeholders are all on the same page
and prevent any misunderstanding or finger pointing. Essential
elements for any meaningful contractual framework should
Rights of affiliates
Protection of both parties intellectual property rights
Each party's responsibilities
Change control provisions which manage any change in scope
Warranties provided by the service provider (intellectual
property, confidentiality, quality services)
Payment dispute mechanisms
Termination for convenience
For the above reasons, one should ensure that a contractual
framework is in place that least addresses the above prior to
engaging in any IT project.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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