Software development agreements vary a lot. Long gone are the days of software development agreements with a stable state range of clauses.

This conclusion arose after recent IT contract drafting work. It inspired a spring clean of our firm’s 200 odd IT template contracts and related documents.

For an Australian contract lawyer, template updating is like a gum tree shedding dead bark, hence the accompanying Hans Heysen painting.

Having cleaned out the software development template collection I moved onto other IT templates. It became even clearer that IT agreements have changed across the board. A lot of dead bark has fallen due to Web 2.0, web services and other developments.

Online IT contracts – this category expands

Returning to software development contracts, I noted that over the years the online category alone had expanded to include templates for the following held in our firm’s collection of IT contracts:

  • Software Development Agreements
  • Website Development Agreements
  • E-commerce Application Development Agreements
  • Online Services Development Agreements
  • Managed Services Agreements

Depending on their individual focus, each needs a contemporary fit with one or more of the following:

  • Online services subscriber / terms of use agreement.
  • Website Hosting Agreement.
  • E-commerce payment facilitator, merchant and end-user agreements.
  • Arrangements for virtualisation, offshoring, web services, social networking, managed services and still the older buzz words of e-commerce, outsourcing, and service levels.

Currently there is a heightened speed of change in IT contracts, nay instability. Fortunately some things remain constant. One is the predominance of the discipline of project management to both proposals and all types of IT contracts.

Project management – this remains a perennial need

I recall it was about 1997 or 1998, online media was starting to grow. I was asked to do a paper for an AIMIA conference. A lot of my work for Web developers at the time was shaped by the realisation that it is best to design contracts around project management, rather than the reverse.

This was not a new discovery, it was just that after researching my paper I gained a clearer view on where online media was heading, what types of services were in demand, and how project management could fit in.

A theme in the paper is that it is best to make a pre-contract proposal, preferably in writing, setting out project management considerations in advance.

Some of the best results in project management are made by having first rate written proposals and very clear verbal pitches. If you propose or pitch well, any subsequent legally binding contract is likely to be much more effective and hassle-free.

What is your IT purchase or sales methodology?

To implement this approach, over the years I have developed methodologies and documents for IT developers and users alike to follow the following recommended best practice:

  • THE PITCH: Make a pitch, following working out what is often called the “business model” appropriate for the target prospect/client. Find ways to communicate the pitch so that the client “gets it”.
  • THE PROCESS: Work the pitch into a broader project management process (eg with specifications settled, timelines, budgeting, quality assurance) or at least a planning or task management tool.
  • THE CONTRACT: Bolt onto those tools effective contractual terms and conditions.
  • THE ROUTINE: Make the pitch, process, contract troika a routine, a habit, something to reuse to help your business.

Proposals and contracts with schedules help manage projects

Contracts which contain a schedule of variables, placed preferably on the first page or front of the contract, help in project management. Schedules in proposals and contracts often help make them easier to understand.

If you’ve used a proposal format with deal variables in a schedule, then contract preparation is made easier.

Information on such variables as the scope of work, fees, any applicable deadlines, and third party licence payments can be cut from the schedule in a proposal and placed into the schedule for a contract. Voila!

This is far better than preparing a customised contract in which the variables are somewhat hidden or difficult or time consuming to find and assess as they are in various clauses of a contract. Variables gathered together in a schedule are easier to locate than variables spread across several pages of a contact.

Proposals and contracts with schedules generally have a higher level of simplicity. Simplicity is good in design, it’s also good for writing proposals and contracts. Proposals and contracts with a good schedule have many benefits.

  • Easier to read.
  • Speeds up document preparation.
  • Increases document re-use.
  • Speeds up negotiations because ultimately it is a format that is easier to follow than sequentially listing of vital information in clause after clause.
  • Tends to encourage executives to engage with contractual considerations rather than farm it off to in-house or external lawyers.

So while templates evolve as technology changes, project management retains its perennial and important role in helping produce good IT proposals and IT contracts.

Noric Dilanchian