 |
Large IT projects often come with a degree of risk for the customer. Often solutions proposed by potential suppliers are set out at a high level, in generic terms without detailed analysis of the customer's existing systems, specific requirements or potential risks with the implementation of that solution. For highly customised solutions, or solutions proposed for business critical systems, it is often desirable for a more detailed consideration of the solution to be undertaken by the supplier (and/or an independent consultant) in conjunction with the customer's staff, so that the customer is in a position to make a better informed decision as to whether to implement the IT solution proposed by that supplier and/or consider particular modifications that may be desirable.
Risk Management
This type of scoping exercise is an excellent risk management tool for the customer, as it enables a more detailed view of the proposed solution to be obtained, in the context of the customer's specific requirements. Generally the scoping exercise will be undertaken with a view to identifying:
- The key risks arising from implementing the proposed solution. These may include potential delays and down-time for existing systems and business operations; data migration and transition issues; and interoperability issues.
- Areas in which the supplier's proposed costs may change due to a change in the scope of the project arising from issues identified as part of the scoping exercise. This may enable the supplier to provide fixed costings for certain parts of the project with a higher degree of certainty, as costing assumptions made in the original proposal will be able to be tested against information and input provided by the customer.
- A detailed project timetable, with key milestones identified for the completion of specific stages of the project.
Deliverables
Specific deliverables from a scoping exercise may include one or more of the following:
- A detailed project plan, with an associated timetable and project milestones. These may be linked to the proposed payment structure, with proportions of the overall cost being payable by the customer for completion (and acceptance) of specific stages of the project.
- A complete technical specification for the solution, including hardware and software requirements to support the solution.
- A detailed breakdown of costs, including licensing costs, implementation and ongoing support costs (as relevant).
- The proposed terms on which the solution will be provided, implemented and supported. This may include standard licensing terms, as well as a tailored supply/installation/implementation agreement for the project, into which the above deliverables will be incorporated.
Scoping Agreement Terms
Where a potential supplier and/or an independent consultant are to be engaged to undertake a scoping exercise, a formal agreement should be entered into, including the following key terms:
- A detailed outline of the deliverables from the scoping exercise, which may include written deliverables, as well as formal or informal briefings to the customer.
- An allocation of responsibilities between the customer and the supplier or consultant, which may include requirements to attend meetings, procure involvement of key persons and incur specific costs.
- A costing for completing the scoping exercise, including what incidental expenses will be met by the customer.
- Details of the key personnel of the customer and of the supplier or consultant who are to be made available to participate in the scoping exercise, and the obligations of those personnel.
- Ownership in the deliverables and intellectual property rights in the deliverables. This may need to be subject to any intellectual property rights of the supplier in proprietary information which is included in the deliverables and involve a grant of licence to the customer to use that proprietary information when using the deliverables.
- A process for dealing with any changes to the project or solution which are proposed by the customer or supplier during the scoping process, which may impact on the scoping exercise.
If the customer is intending to use the scoping process as a way of making the supplier provide a more detailed proposal of the proposed solution, the scoping agreement could also provide for the customer to be able to accept the detailed proposal or for the proposal to be incorporated into draft project agreements, which will then be entered into by the customer and the supplier.
Summary
When IT projects are not successful, this can be due to the fact that solutions proposed by a supplier may not be entirely appropriate for the customer's needs, or the customer's existing systems and operations may not have been fully factored into the consideration of the proposed solution.
By undertaking a scoping exercise, the customer is able to make a more informed decision as to whether to proceed with the proposed solution, and (if the decision is made to proceed) the deliverables from that scoping exercise will be able to be incorporated into the project agreements.
As a supplier, offering to undertake a scoping exercise (which will generally be carried out at the customer's cost) can also help to refine your product/solution offering and anticipate potential issues with the implementation of the project.
Key Contacts
Simon Vannini +64-9-977 5186 simon.vannini@simpsongrierson.com
Michael Sage +64-9-977 5006 mike.sage@simpsongrierson.com
Karen Ngan +64-9-977 5080 karen.ngan@simpsongrierson.com
Jeremy Gray +64-9-977 5009 jeremy.gray@simpsongrierson.com
Note: The information provided in this article is intended to provide general information only. This information is not intended to constitute expert or professional advice and should not be relied upon as such. Specialist legal advice should always be sought for your particular circumstances.
|
|
