Hi everyone - Here are AWESOME risk mitigation strategies for specialists buying software that were a focus of a discussion after the Feb 19th tech show in Seattle show. Those buying software will benefit from below so I'm excited to share!!!
(The following sales tactics that pose risk to specialty contractors have the 'suggested solutions' to each risk listed below each tactic)
1) Handcuffing: When vendors under-quote labor to sign deal at a low price, knowing the true cost will be 200% to 400% higher.
1.a) Solution to Handcuffing: Compel vendor to list all services required for pre-live, go-live, post-live and long term labor to ensure software is adopted and then have vendor included all services for GMP (guaranteed max price) in agreement.
2) Cloud Cuffing: When a cloud provider hosting the solution denies client access to data unless client re-news subscription. (NOTE: sometimes a lifetime license was purchased but if the vendor changes the end user license agreement the lifetime license can be made null and void)
2.a) Solution to cloud cuffing: Get data ownership and a lifetime license 'in writing' AND also have a terms in the agreement that ensures the lifetime license is grandfathered into any and all future agreements should any change event, merger or acquisition occur.
3) Smoke Stacking: When integration of products in a tech stack or software ecosystem are oversold and the integrations do not function well enough for specialty contractors.
3.a) Solution to smoke stacking: Do demos using YOUR data and have key people from ALL departments validate all workflows and witness the integration. Identify any GAPs that the integrations do not handle and have vendor include, in writing, programming to fill all GAPS 'prior to go-live' in the GMP agreement.
4) GC software being re-labelled and sold as specialty software: When GC software is re-labelled as a trade solution despite inability to handle granularity of the said trade.
4.a) Solution to re-labeling: Do demos using YOUR data and have key people from ALL departments validate all workflows and ease of use. Identify the GAPs that the software does not handle and have vendor include, in writing, programming to fill all GAPS 'prior to go-live' in the GMP agreement.
5) R&D deflection: When software vendors collect annual fees or subscriptions that are similar to the fees they collect from general contractors but the R&D and enhancements mostly benefit GCs and/or other markets.
5.a) Solution to R&D deflection: Review vendor's previous 3 years of enhancements to determine fair subscription/annual fees for YOUR trade. If only 10% of the released enhancements we're specific to your trade, negotiate a rate that is in line with that value.
6) M&A disarray: When mergers and acquisitions fail to deliver on promises made to contractors and result in higher cost and lower service.
6.a) Solution to M&A disarray: Have vendor promise service levels in a service level agreement that ALSO includes performance credits should they fail to deliver on any level of service. This ensures that if service levels drop, the investment lowers as well.
7) Custom work cuffing: When service providers complete custom work and write custom reports to make a solution work better for a specialty contractor but fail to disclose the ongoing cost of maintaining the custom work when issues arise during software updates. This results in perpetual and unexpected billable hours to keep the custom work functional.
7.a) Solution to custom work cuffing: Find software that fit your workflows the best and ensure that the vendor and/or service provider includes, in writing, the cost to repair custom work when it breaks and maintain functionality during software updates.
8) Weasel words: Intentionally vague buzz words that misrepresent value.(ie: real time data, connect field to office, single source of truth, seamless integration, end to end)
8.a) Solution to weasel word selling: Extend due diligence as long as possible. SLOW DOWN the decision!!! Have the vendor create demos using YOUR data and have key people from ALL departments validate the workflows and ease of use. "Show me, don't tell me")
Home of the Connection Café.
100 Village Blvd., Suite 200, Princeton, NJ 08540Phone: 609-452-8000 | 888-421-9996 | Fax: 609-452-0474 | firstname.lastname@example.org