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Your ERP contract: 3 key points to consider

By Jean-Baptiste Sachot, 9:45 AM on November 9, 2017

contrat erp contractualisation éditeur logiciel de gestionYou’ve made your decision and you now have a contract in front of you that sets out the legal ins and outs of your project… for better or for worse. How can you be certain that this ERP contract is the right one for your company’s project, its quirks, constraints and any possible developments along the way? Read on to find out which three elements you should keep a particular eye on during the contract process for your new ERP software.

1) A made-to-measure, crystal-clear and scalable ERP contract

Done deal: your licence and service provision in one contract. But this two-in-one arrangement could turn out to be a head-scratcher if you’re not careful. For modern ERP software, companies sign one single contract with the vendor or integration specialist.

Of course, this document has to include the standard basic contractual clauses, such as payment terms and billing. But make sure that it clearly states what is included, what incurs recurring costs, what is on a cost-plus basis (which could vary), if any travel expenses apply, and so on.

Also bear in mind when exactly you sign this contract. Whenever it is, it marks a particular moment in your company’s story. If your company grows, if the volume of data and the number of users change and if maintenance time goes up tenfold, what flexibility does your contract give you? And if your company folds, can you terminate the contract?

You have to consider staff growth, new subsidiaries and hitherto unforeseen needs. Choose an ERP solution that does what you need it to now, but don’t forget to think about the future.

Read also: Non-compliance with schedules, a chronic problem with ERP projects.

2) What has (and hasn’t) your supplier signed up to do

If you’re having a made-to-measure tool, then your contract and its appendices will spell out everything that the software must do. Your provider will then have to develop your tool in line with these specifications: there is a strict performance obligation.

On the other hand, if you’re buying or leasing existing management software, meaning one developed before you entered into a contract, the provider will do exactly what’s expected of it and no more. It will do its utmost to fulfil your needs, but it’s not legally obliged to achieve your stated goal.

Why not? Because you will have bought a finished product, one that comes with a set number of features and that wasn’t designed specifically for you.

Read also: How do you choose a good ERP?

What’s more, you can normally configure this type of package: this could, therefore, involve hundreds of different options depending on what you choose. So, the end result depends much less on your provider and much more on your company (data recovery, proper software use by staff and so on.).

As a result, your provider will undertake to give you everything you need – to a certain extent – to get the results you want. That means that you should only ask your ERP software to do what’s possible, so be realistic.

3) Reversibility clause

Reversibility is one of the main challenges of IT contracts. A reversibility clause guarantees that you can get back all of your data if you decide to terminate your software subscription.

This legal provision is a direct consequence of the rise of SaaS tools. The provider can simply cut your access once you have terminated your contract. It’s as easy as turning the lights off. So, what about your data?

Carefully check how this clause, which is mandatory in France, applies to your situation. Will you be able to recover all of your data at the end of your subscription? In what format? Can you do it independently or will you need help? Will it be free or will you have to pay?

If you’re properly prepared, entering into a contract for your chosen ERP solution shouldn’t be too tricky – especially when you consider what you’ll have when you roll out your new management software. Be sure to pay special attention to these three areas so you have peace of mind when you sign on the dotted line.

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