All parties involved in a system implementation must agree on a statement of work (SOW) before the project can begin. However, as with any lengthy contract full of complicated clauses and legal jargon, it's easy to lose sight of key terms. Omission of important provisions can cause budget problems later in the project.
SOWs from systems integrators (SIs) for software implementation are especially complex given the technical nature of the work. Keep an eye out for these six key points in a statement of work for software implementation to avoid eventual dispute or delay:
A detailed list of expectations for the new system and system integrator participation should be plainly stated within the agreement. System performance indicators such as projected report run times, data storage capacity, and system outputs (reports, metadata, and spending metrics) depict a clear vision of the system’s ultimate functionality. This level of description gives all parties a tangible idea of what “finished” means.
Highlighting expectations for systems integrator team members’ roles and responsibilities and other critical activities is also important. The following points highlight items that should not be overlooked.
An agreement must be established around the project management model. Predetermined governance ensures that service issues have an established mode of resolution. For instance, if an SI’s team is not performing as expected, can either party request team member changes? There should be a structured method of replacing a team member who is not performing. Document these details within the agreement, and the project will run smoothly with the best resources available.
An important yet easily overlooked clarification is the criteria for time that can be billed back to the company. It's far easier to address this issue at the outset of a project. Travel time and expenses are typically included, but it’s smart to get specific parameters for the definition of travel time. For example, are hours spent in a car or plane billable? Ask for an estimate of expected working hours per week for each phase of the project. Each of these items, no matter how minor, will affect the project budget.
The systems integrator should include a section detailing licensing agreements. Terms and cost of licensing should be outlined and agreed upon up front. Additional costs such as yearly maintenance and fees for future upgrades should also be listed. Without these items, ambiguity of ownership can cause problems when an organization needs to make further system changes or updates.
Over time, changes in the business environment might necessitate alterations to the project plan. Be sure that all parties are updated on project revisions by explicitly requiring within the SOW that all changes be documented. If additional work is requested, a new work order needs to be created, signed, and added to the original agreement.
Another critical stipulation to be included in the SOW is project scope. This section should list all the vendor’s responsibilities and tasks, such as implementation/migration, testing, training, and support. This is especially important when working with an ERP system integrator given the complexity of the project. The list will help determine when new work orders are needed. The project scope also sets expectations for the level of support with which the company will provide the vendor. For example, the company must be clear about how many employees will work on the project and which subject matter experts can be consulted for major decisions.
A statement of work that does not contain these elements leaves room for disputes on payment amounts, expectations, and other project details. A detailed statement of work that highlights expectations for the systems integrator, the software vendor, and the employees involved in the project can focus activities on the critical path to completion. Tying payment to performance against these areas is even better.
Trenegy helps companies successfully prepare for software and system implementations by ensuring vendor agreements are clear and comprehensive. To learn more, email us at info@trenegy.com.
