Techies Only – One common approach is to allow technologists (whether internal project team, outside consultant, or some combination of both) to do all of the planning, sourcing, negotiation and contracting for the new acquisition.
Techies Plus Procurement (Purchasing) – The other common approach is for technologists to work side-by-side with the organization’s Procurement (Purchasing) function. Technologists provide the necessary technical input, and Procurement tends to focus on sourcing, pricing, and contractual terms and conditions.
Use of Legal Counsel – Under either approach, the organization might involve legal counsel (in-house or outside counsel) to review finalized contracts prior to their execution, or the organization may not use any legal review. When legal counsel is involved, the attorney’s experience with technology transactions can vary widely. And even when experienced technology counsel is available, rarely is the attorney brought into the negotiation process, the point at which the attorney’s exptertise has the greatest potential to positively affect the outcome of the transaction for the software buyer.
One thing that’s remarkable to me about these approaches to buying software is their inflexibility and persistence. Once an organization adopts one or the other approach, it tends to stay with it indefinitely.
In subsequent posts within this category, I will discuss the pros and cons associated with each of these approaches. I’ll also suggest incremental improvements that any organization can adopt in order to reduce the short- and long-term expense and risk associated with software acquisitions.