IT consultant presenting tag cloud about information technology

Every business will at some point outgrow its IT systems. Usually a complete overhaul is required. A sound objective but when put into practice, most businesses experience delay, cost overruns and changes in specification to name but a few problems.

Here are some tips that should guide you through the maze of IT system changes and hopefully help you to avoid any unwanted problems.

1. Create a tailored, bespoke contract and avoid using standard terms and conditions. This all depends on the size of the project. Generally speaking standard terms and conditions should only be used for low value projects. Bear in mind the IT contractor’s standard terms of business are likely to be very one-sided (i.e. in their favour), so please read them carefully before signing them because if there is a dispute, you will in most cases be bound by those terms and conditions. If you are intending to spend considerable monies on your IT system, then a bespoke contract agreed at the outset is critical (the costs of agreeing one will be minimal in comparison to the significant sums you will be spending on the IT changes).

2. Use a dedicated in-house project manager, someone who has IT knowledge and who is familiar with your systems and requirements. This individual (and ideally a couple of others) should be responsible for progressing the IT project. They should be involved at an early stage in determining what your IT requirements are. You will want a dedicated point of contact at the IT contractor’s end also. This will help minimise any misinformation.

3. Be clear on the project specification. The project manager can assist with this. Also involve some end users who will be using the new systems and use their feedback.

4. A staged process with clear milestones is critical. Aside from helping you to manage cashflow, this will enable you to clearly measure how the project is developing and accommodate any unanticipated changes. As part of this process there should be regular feedback/review meetings to minimise any nasty surprises. There should be regular test stages to ensure the project is progressing smoothly and to identify any faults – avoid having one test stage which is at the end of the project.

5. Give consideration to what happens if things go wrong. Most businesses are heavily reliant on their IT systems, so if the new one fails you will need an appropriate backup system ready and support which can be put into place relatively quickly to minimise disruption to your business. You should, as part of the contract, agree an appropriate mechanism/procedure to deal with disputes and problems arising with the IT system.

6. Give consideration to licences, IPR issues and bespoke software. Who will own these? How will you access them if they are owned by third parties? What happens if there is a dispute? If there is a falling out over the new IT system, you will need sufficient protections in place to protect your access rights to these other licences, software etc. This is something which can be dealt with in your tailored contract.

7. Ensure you are clear on who is responsible for delays and cost overruns. Are you working on the basis of a capped fee or hourly rate? The later can and will in most case significantly increase costs.

8. From start to finish ensure everything is recorded in writing. Agreed action points should be circulated after each review or meeting. Do not underestimate how important this is, more often than not the strength of your position if there is a dispute will come down to whether there is any contemporaneous documentary evidence.

9. Finally, keep everything under constant review. Projects change and if changes to key matters arise, you might need to vary the contract. Provided there is an appropriate variation clause in the contract, this should not be too troublesome to deal with.

For more information, email blogs@gateleyplc.com.


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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.