By Terry Street, Principal Consultant and Procurement and Outsourcing Product Manager, Socitm 
Consulting
The Devil is in the Details. Save arguments – clarify the contract and publish it.
Happy New Year to you all.
A recent conversation has triggered this blog about outcome and contract details.
Outcome-based specifications have their place and can certainly allow bidders to design solutions and service models that embed innovations and exploit their strengths. They can also reduce the time and effort spent on issuing and evaluating tenders and in responding to them. So are they universally a benefit? It is a leading question, and yes I do have the view that there are trade-offs.
I am of the view that, in order for a service to be successful, both parties need a common understanding of three things:
- SCOPE – what is in (and out of) scope in terms of what the supplier does and what the client does?
- QUALITY – what quality can be expected to be sustained?
- CHARGES – what will be paid and when?
When you look at any contract these may feature in different ways, but they need to be there. It is also not just the account manager and client/contracts manager who need to know. Anyone giving or receiving the service will at some point need to understand these three elements and this can be a complex challenge.
Sadly, the contract documents themselves often end up as “shelfware”, consigned to the collection of dust, or else there is so much concern about commercial sensitivity that the documents are locked away. Yet people need to know what has been agreed upon in order to get on with their jobs. How often is the only available copy of the contract a paper one and one that never gets updated? We have the technology to put the information at the fingertips of those who need it, when and where they need it through document management systems, FAQs on the intranet or products like MS SharePoint.
Over the years I’m never ceased to be amazed by the time lost trying to resolve issues around contracts, often disproportionate to the actual impact of the dispute (typically spending hundreds or even thousands of pounds worth of effort to resolve a relatively low value dispute).
One test I suggest clients adopt is to imagine that a number of years have passed and that none of the original players are now involved, all they have are the contract documents. Will it be clear then what it means?
I also strongly suggest tackling scope from both sides: both the solution and what the is responsible for as well as the client responsibilities (as in Schedule 3 of the OGC IT Services Model).
If you wish to discuss any of these issues, respond here or contact: Terry.street@socitmconsulting.co.uk or 07785 916 060.
