The Critical Roles of the Systems & Software Professional ... · Standish Group: Chaos Study Results 2004+ 3 w CHAOS Summary 2009: + success = 34% (delivered on time, budget, on target)

The Critical Roles of the Systems & Software Professional

in the MIS/IT Contracting Process:

Where Lawyers Fear to Tread! Or SHOULD…

© 2006-2011 by Warren S. Reid All Rights Reserved 1

Warren S. Reid, Managing Director

WSR Consulting Group, LLC Management, Technology & Litigation Consulting E-mail: [email protected]

Website: www.wsrcg.com

Office: 818/986-8842

For USC Graduate School Classes:

Spring 2011

Part I. Why Systems Fail?

Part II. The IT Contract & the Systems Life Cycle

Part III. IT Related Contract Clauses

Warren S. Reid: Background

Testifying expert/expert witness in matters re:

The root causes of system failure

ERP project/sw: development; implementation; estimating; scheduling; resourcing; project mgt

Systems Development Life Cycle (SDLC) issues

Systems/software testing & acceptance

IT contract intention, meaning & interpretation

SW QA evaluation & fitness/usability purpose

Software requirements elicitation & control

Valuing IT assets, systems and companies

Testify: Mediations, Arbitrations; State/Fed

Courts; Court of Fed Claims

Expert Witness for “Who’s Who” of

international business including:

U.S. Dept of Justice & Pres. William Clinton

An Asian Stock Exchange; Pepsico; Harrahs Entertainment; B-to-C Internet companies

Her Royal Majesty, the Queen of England;

Compuserve; Fortune 500 retailers; Robotics manufacturing; Distribution companies; POS cases; Big -8 Consulting Firms

ERP software developers; Large grocery store chains;

International ticketing companies; CHLA; DOD, & more.

16 years as IT consultant Partner in Large IT Firms

Designed/implemented/contracted myriad systems

1988, founded: WSR Consulting Group, LLC Consultants/Experts in Computers & Software

Projects have included:

Helping launch FEO for Pres. Carter in 75 days

Oversaw acceptance of CA’s Lotto in 100 days

Helped resolve MESDAQ: day 1 failure.

Extensive industry experience including:

Retail industry, grocery, fast food

POS systems of all kinds

E-business and e-commerce systems

Health care, hospital and HIPAA systems

Robotics and smart buildings, and more

MS & MBA: Wharton Grad School Finance

Developed seminal “IT Success Models”

Guest Lecturer at USC’s grad school programs

Lecturer in law school programs in IT Contracting

Many peer-reviewed articles/book co-author

Developer/co-presenter of video for Attorneys "IT Litigation and Bad Contracts that Foster Failure" (3.5 hrs MCLE credit)

2 w © 2006-2011 by Warren S. Reid All Rights Reserved 2 m

Standish Group: Chaos Study Results 2004+

3 w

CHAOS Summary 2009: + success = 34% (delivered on time, budget, on target)

+ challenged = 44% (late, over budget, < required F&F)

+ failed = 24% (cancelled before complete; delivered & never used) “… numbers represent downtick in success rates from previous study, and significant increase in number of failures … low point in last five study periods & highest failure rates on over a decade.

3 m © 2006-2011 by Warren S. Reid All Rights Reserved

Challenged (on average):

Time Overruns: 84%

$$ Overruns: 56%

Rqmts delivery: ~67%

4

Copyright 2005 by Warren S. Reid

TOP PANACEAS (REALLY?)

1 Spaghetti-ed, Structured, Objectivized

2 CASE-d, Tooled & Retooled

3 TQMed, Quality Assured

4 Rapidly Developed (RAD’d) and RAIDed

5 Mainframed, Mini-ed, Micro-ed, Client-served

6 Reviewed, walk-throughed & inspected

7 BPRed, ERPed, CXOed, PMO-ed

8 Scripted, Relationalized, Downloaded, Integrated

9 ISO-ed. IMC-ed, PMI-ed, CMMi-ed, SEI-ed

10 Converged, Plugged & Played, Verified, Webified

11 Outsourced, InSourced, BackSourced, Off-shored

12 Benchmarked, Metered, SLA’ed, Hosted, Oracled, SAPped

13 Xtremed, Scrummed, Agilated, Leaned-on

14 Y2K’d, Windowed-7, 6 Sigma’d, Java-ed, Googled,

15 SOXed, Secured, Disrupted (service), Hacked,

16 Smart-phoned, i-Padded, i-Podded, & i-Tuned

17 Clouded, Virtualized, Socialized, Twittered, Facebooked & LinkedIn

18 They tried to make me an “Android”

What is the Purpose of “Contract”??

© 2006-2011 by Warren S. Reid All Rights Reserved

TO ALLOCATE RISKS

5 s 3 m

CONTRACTS ALLOCATE RISKS http://www.wsrcg.com/SoftwareFailXpert.php

© 2006-2011 by Warren S. Reid All Rights Reserved 6 w 4 m

Adapted From Dr. Barry Boehm’s MBASE model

1. Customer changed mind

2. Client people not trained

3. Client did not do BPR

4. Only “two more months”

5. They wouldn’t listen

6. Bad data/conversion

7. Customer kept change scope

8. Customer failed @ SIPM

9. Poor cust decision-making

10. Wrong client people

11. Poor client support

12. We/they in Over Heads

1. System doesn’t work

2. We can’t use it

3. System failed in field

4. Fundamental flaws

5. They s/have told us

6. System is full of bugs

7. Limited functionality

8. Developer failed @ SIPM

9. Poor advice

10. Unqualified personnel

11. Wrong devel process

12. We/they in Over Heads


It’s the Same in Virtually Every Litigation … All Over the World!

“He Said … She Said”

Oftentimes, BOTH sides are right & contribute to failure – but at different %s SMART: Specific, Measurable, Attainable, Relevant, Trackable

7 w 16m

“Requirements Elicitation: Why So Difficult – Still?”

8

A STORY: The Same Old Story!! ► Customer asks supplier to bring a rock. Supplier delivers rock.

► Customer says, “Yes, but, actually, I wanted a small blue rock.”

► With delivered, it turns out Customer expected a spherical small blue rock.

► Ultimately, maybe Customer was thinking all along of a small blue marble.

► Maybe not sure, but a small blue marble w/hv been sufficient.

► At each subsequent meeting w Cust, Developer may exclaim, “What do you want it to do?” Developer frustrated bc he had something entirely different in mind. He’s been working long & hard to produce rock w characteristics he thought Cust wanted

► Customer equally frustrated bc he is convinced that he did express it clearly. “Developers just don’t understand!”

© 2006-2011 by Remco Lagarde All Rights Reserved 9

9 s

Standish Group – 1995: “18% of all sw projects fail due to unclear objectives & incomplete reqmts & specs”

Would you think it’s more, or less, today?


Customer Requirements: … Still Critical!

3 m

Stage 1

Research

Stage 2

Contract

Stage 3

Planning &

Resources

Stage 4

Detailed Planning &

Approval to Build

Stage 5

Build & Test

Stage 6

Implement

Building a House

Building a Software System

> You decide

you want to

build a house

> First thing you

do is to define

what you want,

how much it will

cost, where to

build it, who will

build it for you

etc. (Research)

Research

Project

Project

Proposal

Project

Charter

'Rough'

House Plans

Identify the Scope

plus any

Cost or Schedule

Constraints

'Establish an Agreement

between the

Project Sponsor &

Project Manager'

> Find a Builder

> Establish the

type and size of

House you want

plus features

> Establish Price

> Sets allowances

for plumbing,

electrical,

cabinets, etc

> Sign a Contract

Contract

> Builder creates

detailed drawings

for your approval

> Builder obtains

commitments from

the Sub-trades

> Obtains permits etc.

Detailed

Drawings

Materials List

Project Plan

Approval

> Create a Project

Plan & a Schedule

> Negotiate the

Resources to

Build System

Owner finalizes details

> Picks out Bricks

> Picks out Cabinets

> Picks out Plumbing fixtures

> Picks out Electrical fixtures

> Picks out Flooring etc.

Adjust Cost if allowances

exceeded ?

Approve

Changes

Determine the detailed

Requirements needed to Build

the System

User

Reviews

& Approval of

Screens

Build House and Perform Inspections

> On-site inspections by Owners

> On-site inspections by Building Inspectors

> Final Inspection

> Close Deal

&

Move In

> Provide Training

> Implement for

Users

> Provide

Warranty Period

> Close Project

ApprovalApproval

System

'Ready for Use'Quality

Reviews

ApprovalApproval

Approval

Approval

Approve Cost

Changes

Approval

Approval

Approval

House Vs Software Analogy.vsd Rev. #3 Oct. 1, 2002

Build and Test the System

Determine if

Cost & Schedule

contraints can be met

Detailed

Requirements

© 2006-2011 by Brian Pfaff 11

Your Dreamhouse(s)/Dream Systems

© 2006-2011 by Warren S. Reid All Rights Reserved The Crooked House (Sopot, Poland)

www.freshome.com

12

FBI Terror & Crime Sys $170MM – (2 attempts) mismanagement, poor planning, design changes

Student Loan Interest – Lost $8mm interest in sw calc.

UK Pension Sys Crash – 80,000 pub serv couldn’t pay checks

ICI – Chem Industry Giant – inabil to fulfill cust orders due to botched impl re BPR – Customers defect --39% Stock value wiped out

Sumitomo Mitsui Bank – weak security policies allow info leaks -- thieves almost trans $440mm overseas

UK Air Traffic Control – sys down – cancel/delays hit 200K passengers

London Stock Exchange – on last tax day, cap gains iss

MESDAQ – day 1

Barclays – small piece of hw brings down whole banking sys for 18hrs – 5mm customers can’t do anything

Cell Phones – dropped calls, reception bars

Why Are Requirements So Hard… Still?


ELICIT/DEFINE REQUIREMENTS

Three Sources F&F*; (B&D**); specified or implied Non-Performance: (Cost; schedule; methodology) Performance: “-abilities”; Design & UI

DD: Digital Dinosaurs (75+ years of age – approx)

DI: Digital Immigrants (35-70 approx range of years)

DN: Digital Natives (15-30 approx range of years)

DNA: Digital Natives Always (2-10 approx range of years)

Current and future

Business Case Biz processes; Biz rules; Rules engine

Operations parms; Doc map Accept Criteria; RTM; Gaps/Changes; Rollout

Target maint Defect metrics

QA

14 w © 2006-2011 by Warren S. Reid All Rights Reserved ** B&D: Breadth & Depth

* Features & Functions

4 m

SUCCESS

What is it? $, Schedule, Requirements, QA?

Some MTBF?

First to Market?

Lowest Total Cost of Ownership?

Get next round of financing?

Meet biz Case, ROI, growth w less staffing?

Better customer service?

Is it being done? Correctly? Vague, not measurable, afraid to commit (limit)

Not used as benchmark for requirements “chill”

Acceptance Criteria (Post GL maintenance and enhancements) [Did you check References?]


Change is natural – must be embraced (M&A, new biz, consol, systems, vendors, opportunities, realities)

Things done diff across the organization

Buyer gets smarter; learning process; want/need/motiv)

Technology changes (web, mobile, iPhone, data wh, social)

The world changes and so do best practices, SOX)

Unwillingness to defer (YAGNI) or chg processes

BUT Changes impact:

$, Schedule, F&F, QA - And not linearly But who pays/gives/takes?

How do you K for scope? Precise! Scope changes? CM?

Initial est. is an ESTIMATE! Controlled not contingency


More about Requirements Scope Creep (Freeze v. Chill) Embrace

16

WHAT ARE THE

ESTIMATING

FACTORS? (FROM DR. BARRY BOEHM’S COCOMO MODEL)

Scale FactorsPrecedentedness

Development Flexibility

Architecture/Risk resolution

Team Cohesion

Process Maturity

Cost DriversPersonnel

Analyst Capability (ACAP)

Analyst Experience (AEXP)

Programmer Capability

Platform Experience (PEXP)

Language and Tool Experience (LTEX)

Personnel Continuity (PCON)

Project

Use of Software Tools (TOOL)

Multisite Development (SITE)

Development Schedule (SCED)

Platform

Time Constraints (TIME)

Main Storage Constraints (STOR)

Platform Volitility (PVOL)

Product

Required reliability (RELY)

Database Size (DATA)

Product Complexity (CPLX)

Required Reusibility (RUSE)

Documentation match to lifecycle needs (DOCU)


© 2006-2011 Warren S. Reid All Rights Reserved

This model will change and be updated over time 18 s

Risks Known BEFORE Project Starts!

People/Resource Risks Turnover, culture, x-comm.

Top Mgt Commit; Proj Champ

Partner; Ref. Checks/Ref’s Refs

Requirements Risks Poor Project Charter

Defined, Baselined, Implied

Stability, Complexity Incomplete, Misunderstood, Gallop I’faces, Data Conversion

Technology HW, SW, Net, D/B, Internet, Mobile Security; Privacy

C – Correctness I – Integrity A – Available

Tool avail? mature? train? use?

Project & Tech Mgmt Risks Client, Depts, Users, IT, Vend, O/S consults,

attys, custs, analyst, mkt “expectations”

Unclear Leadership – SIPM

Process Risks Project under- or mis-estimated

SEI-CMMi level; ETC &EVM Stds Sched, $$, estimates, change control Not enough time for testing

Shortcuts to SDLC on the fly

Product & Other Risks Performance, testedness & readiness -abilities (scale, use, test, port, maint)

Competent T/O proc, supt, maint? compet; economy; org; regulatory

If you know beforehand… Plan, Contract for, Mitigate, Monitor, Manage Them!

10 m



What Can Possibly Be Misunderstood?! … Everything!

People are different

People have different:

Objectives, perspective

Cultural bias, exp/educ/expertise

Styles of understanding/communicating

Abilities, talents, logic, creativity

Understanding of priorities

Fears: spoken and unspoken

Understanding of what is subjective v objective

Implied, understood, unspoken (needs, rqmts, sizzle)

So, what won’t be misunderstood?

4 m

“We THOUGHT … Contract SAYS” ©2006-2011 by Warren S. Reid All Rights Reserved

# Category What was Understood: What the Contract Says:

1. Suitable System description Bounds scope; Uber-theme

2. What works? Functional requirements … as per specs dated _____

3. How well? Performance reqmts Scal- Port- Avail- Maint- Use- SMART

4. Who Does what? Roles & responsibilities SI? RM? Dispute escal/res? HR rqts/aug?

5. How We Do It? Conduct of project WBS, estim, staff, delivs, PM, SDLC, bugs

6. Just for ME Custom programming services Config, SDLC, PM, est, test, I’face, maint

7. U prove 1st Sys integ/interface/Test/Convert Results NOT Resources; Def Success

8. Min Reqmts Accept Testing Process Who? How? When? Where? Criteria? 5Rs

9. More Min Reqts

(Threshold Reqts)

Key Deliverables: QA; Train; Doc;

It Works!

Exist? Imply v spec? Depth? UI (DD, DI,

DN, DNA) Maintainable? Signoff Procs

10. & Tomorrow? Maint, upgrades, fixes T/Over stds? MTBF-TTFix? SLA? Map?

11. $$ = Mouth? Proposals, workproduct, promises “Parole evidence” rule; 4 corners only

12. Go-Live ALL Systems Go! What’s acceptable? Checklist? Vote?

13. Other Costs/Pymts; ADR; TERMinate; Renew;

Title; X-hire; Site prep; Install hw, sw,

nw, BPR; confid;$ protect; Liab

limits & exclusions

There’s more to THE Sys than A sys (SOS):

$$ limits; penalties; ownership; holdbacks;

remedies; liability limits; privacy; hot sites

20 s 12 m



Why Are Contracts (K) So Important?

Caveat: “Standard K form” favors V/large Ks; used as sub for good mgt/K activ

Caveat: K language often incomplete & ambig; drafters gone; shelf death

Clear & explicit delineation of Party rights (Do/NOT Do!), obligations & expectations

Requires ID, negotiation, appreciation others’ views, beliefs & objectives BEFORE deal

Generally produces much better : working relationship during sane & emergency/surprise moments

prospect of proj success ($, Sch, F&F, QA, SH, Risk; <costs, staff, inv; > C serv, mkt share)

Must be a living document – able/willing to adapt to changes

Best K team knows: risks alloc, finan. resp, strong sense of VALUE, law skill

So, Best Team has: CXO, CFO, biz domain & tech eng/consult, lawyer

Matters of: Fact, Law, Evidence, Risk, Technology

& Why Must YOU Know About Them?

4 m

Introducing: The IT Contracts Model Allocate Risks; Keep On Target; Helps Lead to Project Succes

© Copyright 1998 – 2008 By Warren S. Reid and Richard L. Bernacchi, Esq. All rights reserved

The IT Contracts Model ties together seminal work of:

Richard (Dick) Bernacchi, Esq.,

Partner Emeritus from Irell & Manella, LLP

A founder of the Computer Law field, and

Warren S. Reid, CMC, CFE, CSQE, CSTE

IT expert w 40 years experience in IT contracts, litigation & expert witness areas

Book, monograph, peer reviewed articles author; “IT Success Models” Builder

Model ties key tasks, decisions, deliverables & quality aspects of Systems

Development Life Cycle with related, key IT contract clauses.

The IT Contracts Model was created to enable vendors, integrators, PMs, executives

& SMEs to better understand where/how they fit into the IT contracting process & to

allow them to make informed & measurable contributions to IT Contract Team.


22 w

*SDLC: Systems Development Life Cycle

3 m

3/7/2011

23

Systems Development Life Cycle (SDLC) Traditional/Disciplined Life-Cycle Phases

Initiation & Sys Concept Development Begins when a sponsor id’s need for an opportunity; Concept proposal created. Defines scope/boundary of concepts. Includes Systems Boundary document, Cost Benefit Analysis, Risk Management Plan, and Feasibility Study.

Planning

Develops a Project Management Plan & other planning documents. Provides the basis for acquiring the resources needed to achieve a solution.

Requirements Analysis Analyses user needs and develops user requirements.

Create a Detailed Functional Requirements. Document.

Design Transforms detailed reqmts docs into a complete, detailed Design Document.

Focuses on HOW to deliver the required functionality solution

Development Converts a design into a complete info system incl:

* acquire/install sys environ

* create/test db * prep test case procs & files

* code, compile, refine programs

* perform test readiness rev & procurement tasks.

Integration &

Test Demonstrates developed system conforms to requirements as specified in the Funct Rqmts Doc.

Conducted by QA staff (testers)/Users.

Produces Test Analysis and Defect Tracker reports.

Implement Includes: * implement preparation; * implement of system into production environment,

* resolution of problems identified in the Integration and Test

Ops & Maint

Describes tasks to operate and maintain info systems in a production environment including Post-Implementation

& In-Process reviews

Agile Systems Development Life Cycle (SDLC) One XP core value is open, honest, accurate communication.

XP Rule: Have a customer in the developers office, in line-of-sight at all times

Write tests first – before coding! These automated test cases become the requirements

Programming (and other development tasks) are performed in pairs

Agile teams are generally more experienced because work in a less planned environment

Next iterations of usable code (Sprints)are broken into small chunks every 2 – 6 wks by Customer Rep. Iteration demonstrated to Rep before sent to Customer for testing.

Best on smaller/less complex projects. Daily Scrum meeting to present issues – not status.


http://images.google.com/imgres?imgurl=http://homepages.wmich.edu/~a2quast/computerkey_color.gif&imgrefurl=http://homepages.wmich.edu/~a2quast/teaching4.htm&usg=__rBuHEYurOg2nZtQ3M2h4_4F2zE0=&h=564&w=550&sz=39&hl=en&start=50&sig2=y0bqQ5gxby5Fmvmr9C7C9A&um=1&itbs=1&tbnid=TRmNxCcTHFT6mM:&tbnh=134&tbnw=131&prev=/images?q=computer+operations&start=42&um=1&hl=en&sa=N&tbo=1&rls=com.microsoft:en-us:IE-SearchBox&rlz=1I7GGLL_en&ndsp=21&tbs=isch:1&ei=ePHES7v3GZHCswOppvz

The Systems Development Life Cycle: SDLC

“All good methodologies are

the same!” Warren S. Reid

24 w 4 m © 2006-2011 by Warren S. Reid All Rights Reserved

The Systems Development Life Cycle: SDLC

Personnel

Maintenance

Warranties

Ownership & Protection Title

License Rights

Proprietary Rights Indemnity

Confidentiality & Security

Risks & Rights Risk Of Loss/Damage

Insurance

Price Protection

Renewal Options

Purchase Options

Trade-In Rights

Termination & ADR Term & Termination

Limits & Exclusions Of Liability

Taxes

Miscellaneous Protections

Dispute Resolution Mechanisms

Special Outsourcing Considerations

Basics

Set Stage Recitals

Systems Description

General Provisions Parties To The Contract

General Reps & Warranties

Definition Of Terms

Assignment Of Delegation

Interpretation Of Agreement

Functional Rqmts/Performance Measure

Project Management Project Timetable

Project Management & Reporting

Project Costs & Schedule Payment

Pre-Go Live Items Site Preparation

System Configuration & Installation

Training

Documentation

Low Level, System & Integration

Acceptance Testing

Customize & Convert Custom Programming Requirements

Conversion & Support Services

25 w 2 m © 2006-2011 by Warren S. Reid All Rights Reserved

© 2006-2011 by Warren S. Reid All Rights Reserved 26

I. Personnel Alister Cockburn

II. Dynamism

III. Culture IV. Size

V. Criticality

(% Level 1B) (% Level 2 and 3)

Follow trained steps tailor/revises meth

(% Requirements-change/month)

(% Thriving on chaos vs. order) (Number of Personnel)

(Loss due to impact of defects)

50

50

30 10

5 1

30

10

70

3

10

30

100

300

10

20

30

40

0

30

35

25

20

15

When to Use Agile vs. Planned

Agile Realities Tacit knowledge

Customer rep on dev team & site

Paired programmers

Develop Tests1st: Unit/UAT

Pass cust rep demo before delivery

Limited („just enuf‟) documentation

30 day deliv – valuable, work‟g code

90

From Barry Boehm & Richard Turner 2003

“Balancing Agility and Discipline”

1. Every member responsible 2. Understand Business Case 3. Det Broad Requirements Scope 4. Assemble Team 5. ”Paired Programmers” PLUS 6. Reviews, Inspections, walkthrus 7. Write test cases 1st; rev; automate 8. Entire team in single room 9. Customer Rep(s) & QA on team 10. Adherence to Coding Standards 11. Team Demo/Approval 12. Deliver working code quickly

• Sprint Planning Meeting

• Devel test cases: Unit Tests = Funct Rqts

User Tests = Design Rqts

•Daily Scrum •Daily Work

•Product increment

[Sprint Increment(s)]

•Sprint Review

• Sprint Retrospective

• Update Product Backlog

EXTREME PROGRAMMING TENETS

RELEASE SCRUM PROCESS

SCRUM PROCESS - Artifacts

SCRUM ARTIFACTS

Develop test cases Automated test suite

• Sprint Backlog

• Sprint Backlog Burndown

• Impediment List

• Sprint Retrospective; Updated Estimates

• Product Backlog

• Product Backlog Burndown

• Reqmts docs (?)

• Estimation docs

• Vision, biz case, funding

• Contract; Assemble team

• Init backlog/release plan

• Stakeholder buy-in

• PROCESSES: Test Error Mgmt System Debugging; Code Turnover; Escalation Conversion & Interface; Implementation

II.

III.

IV.

V. VI.

I.


The Systems Development Life Cycle (SDLC) &

Its Relationship to the “Successful” IT Contract Basics

Set Stage Recitals

General Provisions Parties To The Contract General Reps & Warranties Definition Of Terms Assignment Of Delegation Interpretation Of Agreement

Ownership & Protection Title License Rights Proprietary Rights Indemnity Confidentiality & Security

Risks & Rights Risk Of Loss/Damage Insurance Price Protection Renewal Options Purchase Options Trade-In Rights

Termination & ADR Term & Termination Limits & Exclusions Of Liability Taxes Miscellaneous Protections Dispute Resolution Mechanisms

Systems Description

Functional Reqmts & Perform Measure

Project Management

Project Timetable

Project Management & Reporting

Project Costs & Schedule Payment

Pre-Go Live Items

Site Preparation

System Configuration & Installation

Training

Documentation

Low Level, System & Integration

Acceptance Testing

Customize & Convert

Custom Programming Requirements

Conversion & Support Services

Personnel

Maintenance

Warranties

Special Outsourcing Considerations 28 w

2 m © 2006-2011 by Warren S. Reid All Rights Reserved

The IT Contracts Model for Successful Contracts (Top Level)


© 2006-2011 by Warren S. Reid All Rights Reserved 30 w

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The IT Contracts Model for Successful Contracts (Broken down – Lawyer side)

1 m

The IT Contracts Model for Successful Contracts (Broken down – IT side)

© 2006-2011 by Warren S. Reid All Rights Reserved 31 w

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1 m

3. FUNCT RQMTS & PERFORMANCE MEASURES (B)3.1 Desc of biz funct to be performed (or x-ref to RFP)

3.2 Rqmts Elicitation (RE)/Scope Change (s ) Process

- ID specif Users/Classes; assure/sched availability

- Prep timeline; ID RE technq/tools/docs used/produced

- Escalation/dispute resolution process

- Scope s process: proposed, est all impacts,

decis crit, doc, update ests, CPM, staff, monitor

- Embrace change: Iterative, Incremental, interactive

3.3 Incorp of Functional Requirements Docs

- Rqts incl: success crit; '-abilities'; F&F current/future;

UI; rpts; biz procs & rules; ops parms; doc map; RTM;

GAPs/s s; rollout plan; test results; sys.stability; Go-

Live checklist; rqts s process/tools; defer/tradeoff;

training plan; converted data; legacy I'face; security

passw ords; enabled Ops/ Maint. Groups, etc

3.4 Incorp of V‟s proposal(s), w ebsite, marketing matl, etc.

3.5 Performance Parameters:

a. Relationship to functional processing rqmts.

b. Types & volumes of data to be stored

c. Number of users; Locations

d. Special features or capabilities

e. Hosting, SaaS, other service act w trial period

g. Use by aff iliates

h. Transfers to other CPUs or locations

i. Right to make copies, incl bkup or archiv copies

j. Grow th cap meas'ed in increas tranx process rate

k. Capacity for f ield modif ication or enhancement

l. Other V representations3.6 Performance "-ABILITIES" SW QA: ['-abilities'] hw , sw , nw , architecture

USERS (Extl): Avail- Depend- Flex- Integ-

Oper- Reli- Modif- Use- Scala Safety Secur-

Surviv- R&R- Config- Utility; $ Effect [vs benchm'ks]

DEVELS (Internal): Adapt- Audit- Deploy- Reuse- Test-Interop- Maint- Perform- Port- Extense- Struct- Manufact- Trace- Reuse- TEST- Struct-3.7 Relationship to acceptance criteria & testing

3.8 Relationship to ongoing maintenance reqmts

33. Special Outsourcing Considerations (H)

33.1 Biz Considerations, & RISKS (H)33.1a “59% of all O/S Ks fail” (Compass '05; Forrester 33.1b SOX/Regs adherance; No subbing to China33.1c Think w/cost 70-80% less but only profit 20-30%. In fact, most report 1st year savings of 0%33.1d 'Please You; Don’t Ask?'; 90% of time w/say "OK"33.1e Time Zone diff; Infrastructure poor; 22 official too many polit parties; Turnover by

33.1f Security/privacy laws; cyber crime; terrorism

33.1g M/have both orgs' staff on both sites; Build trust

33.1h Define Success (iterative, incremental,

33.1i. OS in internat'l market w /o int. ops exper

33.1j No variety of perspectives in selection process

33.1k Using poorly devel/documented serv/prod spec

33.1l Not doing biz/financial due diligence on OS candid

33.1m Insuff knowledge of OS capacity limits

33.1n Not resolv'g ops issues b4 move to K legal

33.1o No full com plan in effect; no escal, reg sch

33.2 Contract ("K") Considerations (H)

© 2007 Michele Kane, Wendy Gross all rights reserved

33.3 Train both Cust & OS mgm't & operations on O/S K

33.4 Proc to initiate/request new service, s , projs

33.5 Right to use 3rd party OS to in-source/re-source

33.6 Control of arch, tech, and org change stds

33.7 O/S obligs to update w tech advances; refresh tech

33.8 SLAs (how they wk, credits, contin improv oblig, s )

33.9 Commitments regarding supplier personnel

33.10 Financial terms

33.11 Ownership of custom devel/other work product

33.12 Term; terminat'n assist services/termin rights

33.13 Min retent'n per for transit'ned (T) & LT key Ees

33.14 Diff for single silo outsourc'g than for “big bang” tranx

33.15 Keep staff knowl in: apps, biz, in-scope tech, procs to manage OS

33.16 K provisions to secure appropriate supplier talent:

33.17 K provisions to limit use of subs (e.g., to China)

33.3 Change process: biz, staff, tech, ind stds, laws,

33.18 Limit unnecess charges: data recovery; serv re-perform

33.19 Baseline OS resources for ongoing suppt & projs

to allow C to re-priorit/assign OS services/resources

33.20 K s/req OS to track: asset type/loc, ID, ser/model

#s, in serv date; sw/hw vers/upgrades; if own: lease,

licen/fin resp pty; Tie apps to servers; Log s s

33.21 Coop Oblig: betw OS/C/3rd parties; staff; facilities,

equip, sw, doc, biz process access; Adding new OSs;

33.22 K cost reduct'n commits, process improv; Stds implem

33.23 Service level improv (esp if SLAs met but serv unsatis

33.24 Terminat'n assist: doc plan; staff; all equip, sw,

matl, data, 3rd pty Ks/ tools to prov serv; train C/ 3rd pty

in equip, sw, tools; Right to employ OS staff; Right to

33.25 Counsel’s role does not end when deal signed!

17. MAINTENANCE (G)17.1 Start date/maint period

17.2 V‟s termination rights

17.3 Required notice for termination

17.4 B‟s renew rights for guaran period

17.5 Relat‟shp to performance measures

17.6 Types & Desc of maintenance support

17.7 Notice of defects or problems

17.8 Classif ic of types & criticality of maint probs

17.9 Required dispatch or respond time(s)

17.10 Escal of maint suppt if delays to correct probs

17.11 Maximum repair time

17.12 Uptime guarantees

17.13 Replacement of “lemons”

17.14 Avail of spare parts or components

17.15 Limits on Vs refurbishment rights

17.16 B‟s rights to perform maintenance

17.17 B‟s rights to maintenance manuals

17.18 B‟s rights to maintenance training

17.19 Limits on B‟s rights to perform maintenance

17.20 Remedies for delays in providing adeq maint

17.21 V‟s obligation to coordinate third party maint

17.22 B‟s right to get maint o/s principal maint period

17.23 Limits on increases in maintenance fees

17.24 B/U equip avail during extended maint periods

17.25 B‟s rights to future enhancements

17.26 B‟s rights to assign maintenance rights

J

G

I

K

M

Savvy MIS/IT Contracts that: Allocate Risks, Keep You on Target, Help Lead to Success© Copyright 1998-2008 By Warren S. Reid & Richard L. Bernacchi, Esq. All rights reserved

E

Cost

Q

A

S

c

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F&F

Reid's

REqmts

Remedies©2003-8

W arren S. Reid

8. CUSTOM PROGRAMMING SERVICES (E)8.1 Incorp of functional processing rqmts docs

8.2 V‟s obligation to develop custom apps

8.3 Relat‟shp to stipulated performance measures

8.4 Relat‟shp to proj timetable

8.5 Development by V of detailed design specs

8.6 Review /approval by B of detailed design specs

8.7 ID B's resp to create, dev, link, test new BPR

8.8 Prog stds spec; x-ref to sys, prog, user docs std

8.9 Specif ication of change order procedures

8.10 X-ref to system & acceptance test provisions

8.11 V‟s responsib for acceptable unit/sys test procs

8.12 V‟s obligat'n to deliv source code & related docs


8.14 Remedies for delays in completion

8.15 Relat‟shp to termination rights

9. CONVERSION & OTHER SUPPT SERVICES (E)9.1 Data convert: plan, cleanse, map; load; audit; S/O

9.2 Data & Apps sched, resources, conversion

9.3 Development of test data

9.4 Assist to B w ith site acquisition &/or prep

9.5 Assist to B in acquiring other products/services

9.6 Assist to B in locating & screening employees

9.7 Coordination of telecom procurement

9.8 Responsibility for trouble-shooting

9.9 Assist to B w ith development of backup plans

9.10 Assist to B w ith backup arrangements

9.11 Assist to B in developing security plan

9.12 Assist to B in develop'g disaster recovery plan

9.13 Pre-installation machine time

16. WARRANTIES (G)16.1 V‟s f inancial condition

16.2 hw w arranties

16.3 sw w arranties

16.4 Service w arranties

16.5 Pass through of third party w arranties


16.7 Start date(s)/length of w arranty period(s)

16.8 Relat‟shp to maintenance provisions

16.9 Scope of w arranty obligations

16.10 Remedies for failure to meet w arr obligs

16.11 Assignability of w arranties16.12 Relat‟shp to disclaimers/Limits of V‟s liabs

22. RISK OF LOSS/DAMAGE (J)22.1 During shipment

22.2 After shipment

22.3 Cross-reference to insurance provisions

23. INSURANCE (J)23.1 V‟s obligations to provide insurance

23.2 B‟s obligations to provide insurance23.3 Types & scope of coverage23.4 Acceptable underw riters23.5 responsibility for payment of premiums23.6 responsibility for processing claims23.7 Relat‟shp to Limits of liability

24. PRICE PROTECTION (J)24.1 Limits on future price or fee increases

24.2 Disc'ts on future procurem'ts & period of Avail

24.3 Most favored cust treatment & period of Avail

24.4 Guaranteed prices & period of Avail

24.5 Relat‟shp to trade-in provisions

25. RENEWAL OPTIONS (J)25.1 Renew al of hw maintenance support

25.2 Renew al of sw maint &/or enhancem't support

25.3 Lease renew al(s)

25.4 Calc of charges or fees w /i renew al period(s)

26. PURCHASE OPTIONS (J)26.1 Guaranteed prices & period of Avail

26.2 Credits for rent or lease payments

26.3 Method of exercising option

26.4 Assignability of options

26.5 Relat‟shp to accept (AT), w arranty, maint provis

27. TRADE-IN RIGHTS (J)27.1 Right to upgrade to new avail hw /sw ; avail per'd

27.2 Right to upgrade to curr avail hw /sw & avail per

27.3 Calculation of trade-in credits

27.4 Relat‟shp to compatibility representations

27.5 Relat‟shp to guaranteed or future discounts

27.6 Relat‟shp to perform meas, AT, w arr, maint provis

SET STAGE

1. Recitals2. System Desc

PROJECTMGMT (PM)

STAFFING CUSTOMIZE &CONVERT

PRE GO-LIVE ITEMS

10. TRAINING (D)10.1 V‟s obligation to provide training

10.2 Qualif ications of trainers

10.3 Location of training

10.4 Stds for acceptable performance

10.5 Relat‟shp to timetable

10.6 Relat‟shp to proj costs

10.7 Availability of student matls

10.8 Avail of instructor‟s matls & training

10.9 Number of trainees

10.10 B‟s rights to reproduce & use training matls

10.11 Continuing Avail of std V classes

10.12 Continuing Avail of on-site training by V

10.13 Remedies for delays in provid suitable train

11. DOCUMENTATION (D)11.1 Desc of types of docs

11.2 Doc stds for user, system & program docs

11.3 Relationship to proj timetable

11.4 Relationship to performance measures

11.5 B‟s rights to reproduce docs

11.6 B‟s rights to future docs or enhancements

11.7 B‟s rights to source code & related docs

11.8 Remedies for delays or inadequate docs

TERMINATION& ADR

RISKS &RIGHTS

OWNERSHIP&

PROTECTION

SERVICE POSTGO-LIVE

F

CONTRACTING:STRATEGY

& TEAM

C

D

ComputerContract

Collaboration(c) 1991-2008

RLBernacchi, WS Reid

12. PROJECT COSTS & PAYMENT SCHED. (C)12.1 Hw prices, if purchased (incl “bundled” sw )

12.2 Sw prices, if purchased (& if 2b stated sep

12.3 Rental or lease pymts & method of calc

12.4 License fees for sof tw are and applications

12.5 Training fees; Ref resher train'g devel & fees

12.6 Maintenance fees for equipment and/or sw

12.7 Fees/$ for addl services (hosting; SaaS; BU)

12.8 Partial payments tied to major milestones

12.9 Start date for rental or lease payments

12.10 Commencement date for license fees

12.11 Commencement date for maintenance fees

12.12 Credits or of fsets for delays or failures

12.13 Refunds if Contract is terminated

12.14 Most favored nation clause

12.15 No mods/addtl charges w /o w ritten approval

12.16 Invoicing procedures

12.17 Supporting docs

12.18 Required notice for price increases

12.19 Personnel/services rates to price chg orders

12.20 Limits on price increases

12.21 Right to benef it of price reductions

12.22 Relationship to Contract remedies

12.23 Payments under protest

12.24 Of fset rights

12.25 Relat‟shp to dispute resolution mechanisms

28. TERM & TERMINATION (K)28.1 Initial term of K(K) 28.2 Renew at Term(s)

28.3 Def of breach by V 28.4 Def of breach by B

28.4 Definition of breach by B

28.5 Notice of breaches & cure provisions

28.6 Termination by V for breach by B

28.7 Termination by B for breach by V

28.8 Termination by V or B for insolvency/BK

28.9 Obligs of V & B to assure smooth transition

28.10 Survival of certain provisions

29. LIMITS & EXCLUSIONS OF LIABILITY (K)29.1 Express/ implied w arr disclaim not inc in K

29.2 Exclusion of consequential damages

29.3 Limits on V‟s liabilities 29.4 Limits on B‟s liabs

29.5 Xcept'ns to disclaimers, exclusions/Limits

30. TAXES (K)30.1 Responsib for sales/use & prop taxes, etc.

30.2 Right to contest & indemnity

30.3 responsibility for f iling returns

30.4 responsibility for interest & penalties

30.5 Investment tax credit representations

30.6 Remedies for breach invest tax credit reps

31. MISCELLANEOUS PROVISIONS (K)31.1 Avail of spare parts

31.2 Specs for & Avail of supplies

31.3 Covenant not to solicit employees

31.4 Performance bonds

31.5 Applicability of UCC

31.6 Rules re publicity 31.7 Quiet enjoyment

32. DISPUTE RESOLUTION MECHANISMS (K)32.1 Mediation by designated party reps

32.2 Arbitration

a. Types of disputes & method of initiating

b. Location; c. # of arbitrators ("arbs")

d. Qualif icat'ns of arb(s) e. Arb selection

f . Compensation of arbitrators

g. Arbitration rules & procedures

h. Provisional remedies

i. Discovery rules j. Rules of Evidence

k. Funding of arbitration costs

1. Reimbursement of costs & fees

m. Governing law n. Briefs

o. Findings & conclusions

q. Rendering & enforcement of aw ard

32.3 Use of sys pending resolution of disputes

The “HE SAID… SHE SAID…” Chart – for Failed Software Projects

K Area X-Ref

SDLC Step Category:

“-abilities” What Users, Acquirers,

In-house IT Dept Teams Say: What Vendors, Software Developers,

Sys Integrators Say:

2, 3 Biz Case/Reqts

Feasibility Feasibility

System doesn‟t work; Not

what we wanted

You changed your minds; You don‟t

know what you want/need; Not viable

3, 8 Reqts Elicit/ Scope Mgmt

Capability You delivered limited

functionality/performance You continually changed project scope

3, 14,

15

BPR/

Accept Test Compatibility

The system failed in the field

& in production

You didn‟t perform required „business

process reengineer‟ to make it work

1, 2, 3 Recitals/

Feasibility Credibility

Your software, services &

expertise were oversold

You conducted ref checks & Due

Diligence; What didn‟t you do/know?

10, 11 Training/

Implement Usability

No one can use system! Poor

training

“Required staff” never came to

primary/refresher training

1, 14,15 Selection Stability System fundamentally flawed We only need 2 months to fix it all

4, 5, 12,

13

Project/Risk

Mgmt Culpability

You never told us that! You

gave poor advice!

You didn‟t follow our recs; You

changed/delayed making decisions

8, 9. 14,

15 Testing Reliability The system is full of bugs!

Bad data conversion/interface cause

probs. Always have bugs!

4, 5, 12 Project

Mgmt Responsibility

You failed as Systems

Integration Proj. Mgr. - SIPM

No! YOU failed as the SIPM. That role

was not my job!

13 Staffing Availability Bait & Switch! Staff unqual, hi

T/O, poor PMs, Steer Com

YOU bait & switch! Staff unqualif‟d, hi


11 Planning/

SDLC Suitability

You stopped good PM & Sys Dev Life Cycle (SDLC) method

You were unwilling to comply w agreed to/promised/necess methods

3. Funct Rqmts &Perform Measures

4. Project Timetable5. Proj Mmt & Reporting

12. Proj Costs & Pay Sched

6. Site Prep7. Config Deliv/Install10. Training 11. Docs

14. Lower Level Tests15. Accept Tests

8. Custom Prog Services9. Convert/Other Suppt Serv

13. Personnel

16. Warrantees17. Maintenance

18. Title 19. License Rts20. IP Rights Indemnity21. Confidential/Secure

22. Loss/Damage Risk23 Ins 24. Price Protect

25. Renew Opts 26.Purch Opts 27. Trade- in

Rights

28. Term/Terminat'n29. Limits/Excl to Liab

30. Taxes 31. Misc32. Dispute Res Meth

11. General Provisions:- Parties - Gen'l Reps/Warranties

- Definitions - Assignment -Interpret'n

11. GENERAL PROVISIONS (L)

I. Parties to 'Contract' (L)i.1 Correct legal names i.2 Principal places of biz

i.3 Legal Relat‟shp to other entities involved in tranx

i.4 State or jurisdiction of incorporat'n/formation.

i.5 Authority of signatories

II. General Reps & Warranties (L)ii.1 Legal status of entity ii.2 Auth to enter into K

ii.3 No conflicting agreements

ii.4 No legal impediments ii.5 No brokers/agents

III. Definition of Terms (L)

IV. Assignment or Delegation (L)iv.1 Restrictions on assignment &/or delegation

iv.2 Exception for affiliated entities

iv.3 Exception for business reorganizations

iv.4 Except'n for sale or transfer of substant all biz

iv.5 Consents not unreasonably w ithheld

V. Interpretation of Agreement (L)v.1 Entire agreement v.2 Governing law

v.3 Venue of litigation or arbitration

v.4 Consent to in personam jurisdiction of courts

v.5 Situat'n making liquidated damages reasonable

v.6 Joint participation in drafting of K

v.7 Partial invalidity; severability

v.8 Remedies not exclusive

v.9 Number & gender v.10 Waivers

L

If you go to court,you've already

lost

Contracts

ALLOCATERisks

Contracts 'Incentivize' Parties to Cooperate

Contracts take

time, $, hard work

Contracts arean SDLC STEP

Contracts areNEVER Perfect

Contracts force partiesto understand objectives

You can define "SUCCESS" either BEFORE contract is

signed or AFTER delivery. BUT IT WILL BE DEFINED!

GENERALPROVISIONS

NUTS: Not Using

The StandardsU-CRINGE: Unplanned Chang'g

Rqmts IN-validate GoodEconomics/Engineering

18. TITLE (I)18.1 V‟s reps as to ow ner/rights to transf hw /sw

18.2 Transfer of title to hw

18.3 Retention of security interest

18.4 Execution of security docss

18.5 Release of security interest upon payment

18.6 Title xfer to sw (or x-ref to licensing provis)

18.7 Ow ner/license/mkt rights to V made sw mods

18.8 Ow ner/license/mkt rights to B made sw mods

18.9 X-ref to license & authorized use provisions

18.10 Rights to use ideas/invent'ns devel dur'g proj

19. LICENSE RIGHTS (I)19.1 Exclusive or non-exclusive rights

19.2 Term of license

19.3 Products covered

19.4 Types of use permitted:

a. Types of equipment

b. Number of CPUs

c. Number of users

d. Types of apps

e. Timesharing or service bureau activities

f. Locations

g. Use by affiliates


i. Right to make copies, incl bkup/archiv copies

19.5 Rights to source code &/or hw mainten docs

19.6 Relat‟shp to assignment rights

19.7 Relat‟shp to V‟s termination rights

20. PROPRIETARY RIGHTS INDEMNITIES (I)20.1 V‟s indem vs infring: patent/ (c)/ trade sec/IP

20.2 Notice of claims

20.3 V‟s obligation to defend

20.4 B‟s obligation to cooperate

20.5 B‟s right to participate in defense

20.6 V‟s oblig to replace/modify infringing products

20.7 V‟s rights to remove infringing products

20.8 Calc of B‟s refund for products removed by V

21. CONFIDENTIALITY & SECURITY (I)21.1 Definition of V‟s confidential information21.2 Definition of B‟s confidential information21.3 Scope of V‟s obligs for confidentiality/security21.4 Scope of B‟s obligs for confidentiality/security21.5 Remedies for breach21.6 Relat‟shp to termination provisions

1. RECITALS (A)1.1 V‟s areas of expertise, experience, etc.

1.2 B‟s business & data processing rqmts

1.3 V‟s ability or experience to handle B‟s rqmts

1.4 Spec/execut'n of a quality RFP process; req V services

1.5 B‟s issuance of Request For Proposals (RFP)

1.6 V‟s Response to B‟s RFP; feasibil, honest, suitabl

1.7 Addtl docs or communications betw een B & V

1.8 Proposal eval factors & assumpts affecting B‟s decis'ns

1.9 Biz Case Discussion (?)

2. DESC OF SYSTEM (A)2.1 Desc/specs for equip, compo'nts, media, cable, etc.

2.2 Configuration w arranty

2.3 Desc & specs for sys sw ; current; complete; usable

2.4 Desc & specs for packaged apps sw

2.5 Desc & specs for custom mods to packaged apps

2.6 Desc & specs for custom sw apps to be devel by V

2.7 List & Desc of all manuals, system & user docs, etc.2.8 Incorp of RFP, proposals, brochures, mktg matls, etc.2.9 Sys Def (5 Rs: Right person; truck; tools; address; time)2.10 Definitions of other terms & Relationship to system

2.11 Testing: proc; types; rqmt; tools; staff; doc; S/O; crit

2.12 X-refs to other K provisions & exhibits (inc Biz Case)

13. PERSONNEL (F)13.1 V‟s staff quals/B‟s approv rights; evals; courses; exper

13.2 Application certif ied/certif icates; Updated CMMi rating

13.3 Periods of Avail

13.4 Prohibitions against interruptions in Availability

13.5 Temporary replacements for sickness, etc.

13.6 Right to request replacements

13.7 Prohibition against removal or reassignment

A

4. PROJECT TIMETABLE (C)4.1 Definition of proj tasks

4.2 Definition of deliverables for each task

4.3 Estimating meth used; assumps; update procs

4.4 B‟s responsibilities; V‟s responsibilities

4.5 Target completion dates by task

4.6 Final completion dates by task

4.7 B‟s right to delay or cancel proj tasks

4.8 Major perform milestones & relat‟shp to pymt sch

4.9 Delay remedies & bonuses for early perform

4.10 Relationship to termination rights

4.11 Prompt notice of anticipated delays

6. SITE PREPARATION (D)6.1 Preparation & delivery of site prep specs

6.2 B‟s (or V‟s) obligation to prepare site

6.3 V‟s oblig to clarify specs, inspect & certify

6.4 B‟s obligation to approve

6.5 Remedies for improper site preparation

6.6 Remedies for inspection errors

6.7 Effect on proj timetable

7. COMPUTER CONFIG DELIV & INSTALL (D) 7.1 Delivery of complete equipm't configuration

7.2 Delivery of operating sys & other system sw

7.3 Access to site

7.4 Installation obligations of V

7.5 Installation obligations of B

7.6 Diagnost tests & relat'n to Accept Test provis

7.7 Def of completion of equipment installation

7.8 Remedies for delays in delivery or installat'n


Contract Oxymorons- Clearly misunderst'd - Act Naturally

- Same difference - Exact estimate - Good grief - Test organization

0. BASICS (M)0.1 No such thing as a PERFECT contract (K)

0.2 The PROCESS is key, NOT just the contract

0.3 K is a LIVING doc; w illing to adapt to change

0.4 K lang often ambig/incomplete; Drafters gone

0.5 Clear/explicit delineat'n V/B rights, obligs, expects

0.6 Req. ID, negot, apprec others' view s, objs B4 deal

0.7 Generally produces much better:

a. w ork'g relat during emergency/surprise periods

b. prospect of project success:

i. $, Sch, F&F, QA, SH, Risk ii. < costs, staff, inv; > C serv, mkt share

0.8 Best K Team know s: alloc risk; $ resp; law ; value

0.9 Best Team:CXO; CFO; Law yer; SME/eng xperts

14. LOW LEVEL, SYSTEM & INTEGRAT'N TESTS (D)14.1 Diagnostic tests of hw , infra, netw are

14.2 All Kinds of Systems:

End-User; MIS; Outsourced; Commercial;

Military; Operating Systems (latent error stats avail)

14.3 All manner of tests for funct & '-abilities' incl:

Dynamic tests - ~85% incl:

- w hite/black box; sub-routine; unit; integ, system

- Interface, data audit, test of/w converted data

- new funct; regression; performance; capability;

- Indep V&V; Viral, Security; Acceptance; Beta

- '-ability' (use-, scal-, port-, maint-, reuse-,

recover-, failover, stress, bullet & many more

Static Tests - ~15% incl:

- review s; w alk-thrus; inspections

14.4 For each test level consider no. of tests and:

- Goal, objectives, success criteria

- Def of accept results to move to next test level

- Test tools: decide, acquire, train; # test environs

- Exper test staff: leads, SMEs, analyst, testers, QA

- Test: sched, train'g, environ, equip; access

- Test results review : w ho, w hen, turnaround time

- No. of shifts, def of scenarios; end-to-end tests

- Std test docs; signoff; rigor & format of error logs

- Rigor of error root cause id, est to f ix, f ix process

- Test metrics to rept progress, issues and probs

14.5 Desc of error severity levels and time to repair each

14.6 Escalation Process; SWAT - SW Adjudication Team

14.7 Maintenance service during testing


14.9 Remedies for failure to meet test criteria


15. ACCEPTANCE TESTING (D)15.1 Live or simulated environ; w new BPR15.2 Desc of test data & responsibility for prep15.3 Desc of test procedures & criteria15.4 Relat‟shp to funct rqmts & perform stds15.5 Period of testing15.6 Review of test results15.7 Correction of errors & problems15.8 Definition of acceptance15.9 Remedies for failure to meet accept criteria15.10 Relationship to w arranty & maint provisions


An ORAL contract isn't worth the paper itswritten on!

B

Balance liabil limits w

essential purpose of

remedies

TheBARGAIN?

ABBREVIATIONS: K = Contract Pty = Party (to a contract)

V = Vendor; B = Buyer BU = Backup

SDLC = System Development Life Cycle

sw = softw are; hw = hardw are; nw = netw are

proc = process; proj = project LT = Long Term

PM = Project Manager recs = recommendations

relat'shp = relationship proc = process(es)

s = delta = change Desc = description

RFP = Request For Proposal ID= identify

rqmt = requirement; RE = Rqmts Elicitation (proc)

5. PROJECT MANAGEMENT (PM) & REPORTING (C)5.1 Steering Comm role, structure, makeup, processes

5.2 SWAT Team role, structure, makeup, processes

5.3 Named Sys Integrator's role, resp, auth, accountability

5.4 Desc of V‟s project team; Desc of B‟s proj team

5.5 Designation of V‟s PM; Designation of B‟s PM

5.6 Determ SDLC METHOD to be used; rules to deviate

5.7 PM Tools/Measures: EVM; CPM; ETC; $/sch variances

5.8 V‟s resp for PM; proj rpt'g: format; freq; distrib; detail

5.9 V‟s/B's resp: BPR/new proc dev, link, train, test, approv

5.10 V‟s resp to ID, manage, mitigate RISKS, probs, delays

5.11 B‟s responsibity to address V's probs/recs in proj rpts

5.12 B‟s responsibility to assist V

5.13 B‟s responsibility for project problems or delays

5.14 Relationship to project timetable

5.15 Remedies for loss/reassignment of V‟s Proj Mgr (PM)

OutSourcing:M Kane, W Gross

H 33.1 Biz Consid's33.2 K Consid's

The IT Contracts Model for Successful Contracts (Detailed) http://www.wsrcg.com/PDFs/model_itcontracting.pdf

© 2006-2011 Warren S. Reid All Rights Reserved This model will change and be updated over time 32 w 3 m

http://www.wsrcg.com/PDFs/model_itcontracting.pdf

3/7/2011

33

3. FUNCT RQMTS & PERFORMANCE MEASURES (B)3.1 Desc of biz funct to be performed (or x-ref to RFP)

3.2 Rqmts Elicitation (RE)/Scope Change (s ) Process




- Scope s process: proposed, est all impacts,


- Embrace change : Iterative, Incremental, interactive

3.3 Incorp of Functional Requirements Docs



GAPs/s s; rollout plan; test results; sys.stability; Go-

Live checklist; rqts s process/tools; defer/tradeoff;


passw ords; enabled Ops/ Maint. Groups, etc

3.4 Incorp of V‟s proposal(s), w ebsite, marketing matl, etc.




c. Number of users; Locations



g. Use by aff iliates


i. Right to make copies, incl bkup or archiv copies

j. Grow th cap meas'ed in increas tranx process rate

k. Capacity for f ield modif ication or enhancement

l. Other V representations3.6 Performance "-ABILITIES" SW QA: ['-abilities'] hw , sw , nw , architecture



Surviv- R&R- Config- Utility; $ Effect [vs benchm'ks]

DEVELS (Internal): Adapt- Audit- Deploy- Reuse- Test-Interop- Maint- Perform- Port- Extense- Struct- Manufact- Trace- Reuse- TEST- Struct-3.7 Relationship to acceptance criteria & testing


33. SPECIAL OUTSOURCING CONCERNS 33.1 Biz Considerations, & RISKS:

33.1a “59% of all O/S Ks fail” (Compass '05; Forrester '07)

33.1b SOX/Regs adherance; No subbing to China

33.1c Think w /cost 70-80% less but only profit 20-30%.

In fact, most report 1st year savings of 0%

33.1d 'Please You; Don‟t Ask?'; 90% of time w /say "OK"

33.1e Time Zone diff; Infrastructure poor; 22 off icial langs;

too many polit parties; Turnover by “Group/Floor”

33.1f Security/privacy law s; cyber crime; terrorism

33.1g Must have both orgs' staff on both sites; Build trust

33.1h Define Success (iterative, incremental, interactive)

33.1i. OS in international market w /o int. ops experience

33.1j Not using variety of perspectives in selection process

33.1k Using poorly devel/documented serv/prod spec

33.1l Not doing biz/f inancial due diligence on OS candid

33.1m Insuff know ledge of OS capacity limits

33.1n Not resolv'g ops issues b4 move to K legal aspects

33.1o.No full com plan in effect, incl escal, reg sch meets,

33.2 O/S CONTRACT CONSIDERATIONS:© 2007 Michele Kane & Wendy Gross All rights reserved

33.3 Train both Cust & OS mgmt & ops on O/S K

33.4 Process to initiate/request new service, changes, projs

33.5 Right to use 3rd party OS to in-source, to re-source


33.7 O/S obligs to keep pace w tech advances & refresh tech

33.8 SLAs (how they w k, credits, contin improv oblig, chges)

33.9 Commitments regarding supplier personnel


33.11 Ow nership of custom devel & other w ork product

33.12 Term, terminat'n assist services, rights to terminate

33.13 Min retent'n per for transit'ned (T) & long term crit Ees

33.14 Diff for single silo outsourc'g than for “big bang” tranx

33.15 Keep staff know l apps, biz, in-scope tec, procs 2 mge OS

33.16 K provisions to secure appropriate supplier talent:

33.17 K provisions to limit use of subs (e.g., to China)

33.3 Change process: biz, staff, tech, ind stds, law s, regs &

33.18 Limit unnecess charges: data recovery; serv re-perform

33.19 Baseline OS resources for ongoing supt & projects to

33.20 K s/req OS to track (at min): asset type/location, ID,

33.21 Coop Oblig: betw OS/C/3rd parties; staff; facilities,

33.22 K cost reduct'n commits, process improv; Stds implem

33.23 Service level improv (esp if SLAs met but serv unsatis

33.24 Terminat'n assist: doc plan; staff; all equip, sw , matl,

33.25 Counsel‟s role does not end w hen deal signed!

17. MAINTENANCE (G)17.1 Start date/maint period

17.2 V‟s termination rights


17.4 B‟s renew rights for guaran period




17.8 Classif ic of types & criticality of maint probs








17.16 B‟s rights to perform maintenance

17.17 B‟s rights to maintenance manuals

17.18 B‟s rights to maintenance training

17.19 Limits on B‟s rights to perform maintenance


17.21 V‟s obligation to coordinate third party maint

17.22 B‟s right to get maint o/s principal maint period



17.25 B‟s rights to future enhancements

17.26 B‟s rights to assign maintenance rights

J

G

I

K

M

The MIS/IT Contracts Success Model: Allocates Risks, Enforces Focus, Leads to Success© Copyright 1998-2010 By Warren S. Reid & Richard L. Bernacchi, Esq. All rights reserved.

E

Cost

Q

A

S

c

h

e

d

F&F

Reid's

REqmts

Remedies©2003-8

W arren S. Reid

8. CUSTOM PROGRAMMING SERVICES (E)8.1 Incorp of functional processing rqmts docs

8.2 V‟s obligation to develop custom apps

8.3 Relat‟shp to stipulated performance measures



8.6 Review /approval by B of detailed design specs

8.7 ID B's resp to create, dev, link, test new BPR

8.8 Prog stds spec; x-ref to sys, prog, user docs std

8.9 Specif ication of change order procedures

8.10 X-ref to system & acceptance test provisions

8.11 V‟s responsib for acceptable unit/sys test procs

8.12 V‟s obligat'n to deliv source code & related docs




9. CONVERSION & OTHER SUPPT SERVICES (E)9.1 Convert Data: plan; clean; map; load; audit; S/O

9.2 Data & Apps sched, resources, conversion


9.4 Assist to B w ith site acquisition &/or prep

9.5 Assist to B in acquiring other products/services



9.8 Responsibility for trouble-shooting

9.9 Assist to B w ith development of backup plans

9.10 Assist to B w ith backup arrangements


9.12 Assist to B in develop'g disaster recovery plan


16. WARRANTIES (G)16.1 V‟s f inancial condition

16.2 hw w arranties

16.3 sw w arranties

16.4 Service w arranties

16.5 Pass through of third party w arranties


16.7 Start date(s)/length of w arranty period(s)

16.8 Relat‟shp to maintenance provisions

16.9 Scope of w arranty obligations

16.10 Remedies for failure to meet w arr obligs

16.11 Assignability of w arranties16.12 Relat‟shp to disclaimers/Limits of V‟s liabs

22. RISK OF LOSS/DAMAGE (J)22.1 During shipment

22.2 After shipment

22.3 Cross-reference to insurance provisions

23. INSURANCE (J)23.1 V‟s obligations to provide insurance

23.2 B‟s obligations to provide insurance23.3 Types & scope of coverage23.4 Acceptable underw riters23.5 responsibility for payment of premiums23.6 responsibility for processing claims23.7 Relat‟shp to Limits of liability

24. PRICE PROTECTION (J)24.1 Limits on future price or fee increases

24.2 Disc'ts on future procurem'ts & period of Avail

24.3 Most favored cust treatment & period of Avail

24.4 Guaranteed prices & period of Avail

24.5 Relat‟shp to trade-in provisions

25. RENEWAL OPTIONS (J)25.1 Renew al of hw maintenance support

25.2 Renew al of sw maint &/or enhancem't support

25.3 Lease renew al(s)

25.4 Calc of charges or fees w /i renew al period(s)

26. PURCHASE OPTIONS (J)26.1 Guaranteed prices & period of Avail

26.2 Credits for rent or lease payments

26.3 Method of exercising option

26.4 Assignability of options

26.5 Relat‟shp to accept (AT), w arranty, maint provis

27. TRADE-IN RIGHTS (J)27.1 Right to upgrade to new avail hw /sw ; avail per'd

27.2 Right to upgrade to curr avail hw /sw & avail per

27.3 Calculation of trade-in credits

27.4 Relat‟shp to compatibility representations

27.5 Relat‟shp to guaranteed or future discounts

27.6 Relat‟shp to perform meas, AT, w arr, maint provis

SET STAGE1. Recitals

2. System Desc

PROJECTMGMT (PM)

STAFFING CUSTOMIZE &CONVERT

PRE GO-LIVE ITEMS

10. TRAINING (D)10.1 V‟s obligation to provide training

10.2 Qualif ications of trainers



10.5 Relat‟shp to timetable

10.6 Relat‟shp to proj costs

10.7 Availability of student matls

10.8 Avail of instructor‟s matls & training


10.10 B‟s rights to reproduce & use training matls




11. DOCUMENTATION (D)11.1 Desc of types of docs

11.2 Doc stds for user, system & program docs



11.5 B‟s rights to reproduce docs

11.6 B‟s rights to future docs or enhancements

11.7 B‟s rights to source code & related docs


TERMINATION& ADR

RISKS &RIGHTS

OWNERSHIP&

PROTECTION

SERVICE POSTGO-LIVE

F

CONTRACTING:STRATEGY

& TEAM

C

D

ComputerContract

Collaboration(c) 1991-2008

RLBernacchi, WS Reid

12. PROJECT COSTS & PAYMENT SCHED. (C)12.1 Hw prices, if purchased (incl “bundled” sw )



12.4 License fees for sof tw are and applications

12.5 Training fees; Refresher train'g devel & fees

12.6 Maintenance fees for equipment and/or sw

12.7 Fees/$ for addl services (hosting; SaaS; BU)

12.8 Partial paym ents tied to m aj m ilestones




12.12 Credits or of fsets for delays or failures

12.13 Refunds if Contract is terminated


12.15 No mods/addtl charges w /o w ritten approval




12.19 Personnel/services rates to price chg orders


12.21 Right to benef it of price reductions

12.22 Relationship to Contract remedies


12.24 Offset rights

12.25 Relat‟shp to dispute resolution mechanisms

28. TERM & TERMINATION (K)28.1 Initial term of K(K) 28.2 Renew at Term(s)

28.3 Def of breach by V 28.4 Def of breach by B

28.4 Definition of breach by B

28.5 Notice of breaches & cure provisions

28.6 Termination by V for breach by B

28.7 Termination by B for breach by V

28.8 Termination by V or B for insolvency/BK

28.9 Obligs of V & B to assure smooth transition

28.10 Survival of certain provisions

29. LIMITS & EXCLUSIONS OF LIABILITY (K)29.1 Express/ implied w arr disclaim not inc in K

29.2 Exclusion of consequential damages

29.3 Limits on V‟s liabilities 29.4 Limits on B‟s liabs

29.5 Xcept'ns to disclaimers, exclusions/Limits

30. TAXES (K)30.1 Responsib for sales/use & prop taxes, etc.

30.2 Right to contest & indemnity

30.3 responsibility for f iling returns

30.4 responsibility for interest & penalties

30.5 Investment tax credit representations

30.6 Remedies for breach invest tax credit reps

31. MISCELLANEOUS PROVISIONS (K)31.1 Avail of spare parts

31.2 Specs for & Avail of supplies

31.3 Covenant not to solicit employees

31.4 Performance bonds

31.5 Applicability of UCC

31.6 Rules re publicity 31.7 Quiet enjoyment

32. DISPUTE RESOLUTION MECHANISMS (K)32.1 Mediation by designated party reps

32.2 Arbitration

a. Types of disputes & method of initiating

b. Location; c. # of arbitrators ("arbs")

d. Qualif icat'ns of arb(s) e. Arb selection

f . Compensation of arbitrators

g. Arbitration rules & procedures

h. Provisional remedies

i. Discovery rules j. Rules of Evidence

k. Funding of arbitration costs

1. Reimbursement of costs & fees

m. Governing law n. Briefs

o. Findings & conclusions

q. Rendering & enforcement of aw ard

32.3 Use of sys pending resolution of disputes

The “HE SAID… SHE SAID…” Chart – for Failed Software Projects

K Area X-Ref

SDLC Step Category:

“-abilities” What Users, Acquirers,

In-house IT Dept Teams Say: What Vendors, Software Developers,

Sys Integrators Say:

2, 3 Biz Case/Reqts

Feasibility Feasibility

System doesn‟t work; Not

what we wanted

You changed your minds; You don‟t

know what you want/need; Not viable

3, 8 Reqts Elicit/ Scope Mgmt

Capability You delivered limited

functionality/performance You continually changed project scope

3, 14,

15

BPR/

Accept Test Compatibility

The system failed in the field

& in production

You didn‟t perform required „business

process reengineer‟ to make it work

1, 2, 3 Recitals/

Feasibility Credibility

Your software, services &

expertise were oversold

You conducted ref checks & Due

Diligence; What didn‟t you do/know?

10, 11 Training/

Implement Usability

No one can use system! Poor

training

“Required staff” never came to

primary/refresher training

1, 14,15 Selection Stability System fundamentally flawed We only need 2 months to fix it all

4, 5, 12,

13

Project/Risk

Mgmt Culpability

You never told us that! You

gave poor advice!

You didn‟t follow our recs; You

changed/delayed making decisions

8, 9. 14,

15 Testing Reliability The system is full of bugs!

Bad data conversion/interface cause

probs. Always have bugs!

4, 5, 12 Project

Mgmt Responsibility

You failed as Systems

Integration Proj. Mgr. - SIPM

No! YOU failed as the SIPM. That role

was not my job!

13 Staffing Availability Bait & Switch! Staff unqual, hi


YOU bait & switch! Staff unqualif‟d, hi


11 Planning/

SDLC Suitability

You stopped good PM & Sys Dev Life Cycle (SDLC) method

You were unwilling to comply w agreed to/promised/necess methods

3. Funct Rqmts &Perform Measures

4. Project Timetable5. Proj Mmt & Reporting

12. Proj Costs & Pay Sched

6. Site Prep7. Config Deliv /Install10. Training 11. Docs

14. Lower Lev el Tests15. Accept Tests

8. Custom Prog Services9. Convert/Other Suppt Serv13. Personnel

16. Warrantees17. Maintenance

18. Title 19. License Rts20. IP Rights Indemnity21. Confidential/Secure

22. Loss/Damage Risk23 Ins 24. Price Protect

25. Renew Opts 26.Purch Opts 27. Trade- in

Rights

28. Term/Terminat'n29. Limits/Excl to Liab

30. Taxes 31. Misc32. Dispute Res Meth

11. General Prov isions:- Parties - Gen'l Reps/Warranties

- Definitions - Assignment -Interpret'n

11. GENERAL PROVISIONS (L)

I. Parties to 'Contract' (L)i.1 Correct legal names i.2 Principal places of biz

i.3 Legal Relat‟shp to other entities involved in tranx

i.4 State or jurisdiction of incorporat'n/formation.

i.5 Authority of signatories

II. General Reps & Warranties (L)ii.1 Legal status of entity ii.2 Auth to enter into K

ii.3 No conflicting agreements

ii.4 No legal impediments ii.5 No brokers/agents

III. Definition of Terms (L)

IV. Assignment or Delegation (L)iv.1 Restrictions on assignment &/or delegation

iv.2 Exception for aff iliated entities

iv.3 Exception for business reorganizations

iv.4 Except'n for sale or transfer of substant all biz

iv.5 Consents not unreasonably w ithheld

V. Interpretation of Agreement (L)v.1 Entire agreement v.2 Governing law

v.3 Venue of litigation or arbitration

v.4 Consent to in personam jurisdiction of courts

v.5 Situat'n making liquidated damages reasonable

v.6 Joint participation in drafting of K

v.7 Partial invalidity; severability

v.8 Remedies not exclusive

v.9 Number & gender v.10 Waivers

L

If you go to court,you've already

lost

ContractsALLOCATE

Risks

Contracts 'Incentivize' Parties to Cooperate

Contracts taketime, $, hard work

Contracts arean SDLC STEP

Contracts areNEVER Perfect

Contracts force partiesto understand objectives

You can define "SUCCESS" either BEFORE contract is

signed or AFTER delivery. BUT IT WILL BE DEFINED!

GENERALPROVISIONS

NUTS: Not UsingThe Standards

U-CRINGE: Unplanned Chang'g

Rqmts IN-validate Good

Economics/Engineering

18. TITLE (I)18.1 V‟s reps as to ow ner/rights to transf hw /sw

18.2 Transfer of title to hw

18.3 Retention of security interest

18.4 Execution of security docss

18.5 Release of security interest upon payment

18.6 Title xfer to sw (or x-ref to licensing provis)

18.7 Ow ner/license/mkt rights to V made sw mods

18.8 Ow ner/license/mkt rights to B made sw mods

18.9 X-ref to license & authorized use provisions

18.10 Rights to use ideas/invent'ns devel dur'g proj

19. LICENSE RIGHTS (I)19.1 Exclusive or non-exclusive rights

19.2 Term of license

19.3 Products covered

19.4 Types of use permitted:

a. Types of equipment

b. Number of CPUs

c. Number of users

d. Types of apps

e. Timesharing or service bureau activities

f. Locations



i. Right to make copies, incl bkup/archiv copies

19.5 Rights to source code &/or hw mainten docs

19.6 Relat‟shp to assignment rights

19.7 Relat‟shp to V‟s termination rights

20. PROPRIETARY RIGHTS INDEMNITIES (I)20.1 V‟s indem vs infring: patent/ (c)/ trade sec/IP

20.2 Notice of claims

20.3 V‟s obligation to defend

20.4 B‟s obligation to cooperate

20.5 B‟s right to participate in defense

20.6 V‟s oblig to replace/modify infringing products

20.7 V‟s rights to remove infringing products

20.8 Calc of B‟s refund for products removed by V

21. CONFIDENTIALITY & SECURITY (I)21.1 Definition of V‟s confidential information21.2 Definition of B‟s confidential information21.3 Scope of V‟s obligs for confidentiality/security21.4 Scope of B‟s obligs for confidentiality/security21.5 Remedies for breach21.6 Relat‟shp to termination provisions

13. PERSONNEL (F)13.1 V‟s staff quals/B‟s approv rights; evals; courses; exper

13.2 Application certif ied/certif icates; Updated CMMi rating

13.3 Periods of Avail





A

4. PROJECT TIMETABLE (C)4.1 Definition of proj tasks


4.3 Estimat'g meth used; assumps; update procs

4.4 B‟s responsibilities; V‟s responsibilities



4.7 B‟s right to delay or cancel proj tasks

4.8 Major perform milestones & relat‟shp to pymt sch




6. SITE PREPARATION (D)6.1 Preparation & delivery of site prep specs

6.2 B‟s (or V‟s) obligation to prepare site

6.3 V‟s oblig to clarify specs, inspect & certify

6.4 B‟s obligation to approve



6.7 Effect on proj timetable

7. COMPUTER CONFIG DELIV & INSTALL (D) 7.1 Delivery of complete equipm't configuration


7.3 Access to site



7.6 Diagnost tests & relat'n to Accept Test provis


7.8 Remedies for delays in delivery or installat'n


Contract Oxymorons- Clearly misunderst'd - Act Naturally

- Same difference - Exact estimate - Good grief - Test organization

0. BASICS (M)0.1 No such thing as a PERFECT contract (K)

0.2 The PROCESS is key, NOT just the contract

0.3 K is a LIVING doc; w illing to adapt to change

0.4 K lang often ambig/incomplete; Drafters gone

0.5 Clear/explicit delineat'n V/B rights, obligs, expects

0.6 Req. ID, negot, apprec others' view s, objs B4 deal

0.7 Generally produces much better:

a. w ork'g relat during emergency/surprise periods

b. prospect of project success:

i. $, Sch, F&F, QA, SH, Risk ii. < costs, staff, inv; > C serv, mkt share

0.8 Best K Team know s: alloc risk; $ resp; law ; value

0.9 Best Team:CXO; CFO; Law yer; SME/eng xperts

14. LOW LEVEL, SYSTEM & INTEGRAT'N TESTS (D)14.1 Diagnostic tests of hw , infra, netw are



Military; Operating Systems (latent error stats avail)

14.3 All manner of tests for funct & '-abilities' incl: Dynamic tests - ~85% incl:

- w hite/black box; sub-routine; unit; integ, system



- Indep V&V; Viral, Security; Acceptance; Beta

- '-ability' (use-, scal-, port-, maint-, reuse-,

recover-, failover, stress, bullet & many more

Static Tests - ~15% incl:

- Reviews; Walk-thrus; Inspections





- Exper test staff: leads, SMEs, analyst, testers, QA

- Test: sched, train'g, environ, equip; access

- Test results review : w ho, w hen, turnaround time



- Rigor of error root cause id, est to f ix, f ix process


14.5 Desc of error severity levels and time to repair each

14.6 Escalation Process; SWAT - SW Adjudication Team





15. ACCEPTANCE TESTING (D)

15.1 Live or simulated environ; w new BPR15.2 Desc of test data & responsibility for prep15.3 Desc of test procedures & criteria15.4 Relat‟shp to funct rqmts & perform stds15.5 Period of testing15.6 Review of test results15.7 Correction of errors & problems15.8 Definition of acceptance15.9 Remedies for failure to meet accept criteria15.10 Relationship to w arranty & maint provisions


An ORAL contract isn't worth the paper itswritten on!

B

Balance liabil limits w

essential purpose of

remedies

TheBARGAIN?

ABBREVIATIONS: K = Contract Pty = Party (to a contract)

V = Vendor; B = Buyer BU = Backup

SDLC = System Development Life Cycle

sw = softw are; hw = hardw are; nw = netw are

proc = process; proj = project LT = Long Term

PM = Project Manager recs = recommendations

relat'shp = relationship proc = process(es)

s = delta = change Desc = description

RFP = Request For Proposal ID= identify

rqmt = requirement; RE = Rqmts Elicitation (proc)

5. PROJECT MANAGEMENT (PM) & REPORTING (C)5.1 Steering Comm role, structure, makeup, processes



5.4 Desc of V‟s project team; Desc of B‟s proj team

5.5 Designation of V‟s PM role/resp; Designation of B‟s PM

5.6 Select "best" proj SDLC (Discilpined <--> Agile)

Agree on doc, embedded persons, tests, deviation


5.8 V‟s resp for PM; proj rpt'g: format; freq; distrib; detail

5.9 V‟s/B's resp: BPR/new proc dev, link, train, test, approv

5.10 V‟s resp to ID, manage, mitigate RISKS, probs, delays

5.11 B‟s responsibity to address V's probs/recs in proj rpts

5.12 B‟s resp to assist V & for project problems and delay


5.15 Remedies for loss/reassignment of V‟s Proj Mgr (PM)

OutSourcing:M Kane, W Gross

H 33.1 Biz Consid's33.2 K Consid's

1. RECITALS (A)

1.1 V‟s areas of expertise, experience, etc.

1.2 B‟s business & data processing rqmts

1.3 V‟s ability or experience to handle B‟s rqmts

1.4 Spec/execut'n of a quality RFP process; req V services

1.5 B‟s issuance of Request For Proposals (RFP)

1.6 V‟s Response to B‟s RFP; feasibil, honest, suitable

1.7 Addtl docs or communications betw een B & V

1.8 Proposal eval factors & assumpts affecting B‟s decis'ns

1.9 Biz Case Discussion (?)

2. DESCRIPTION OF SYSTEM (A)

2.1 Desc/specs for equip, compo'nts, media, cable, etc.

2.2 Configuration w arranty

2.3 Desc & specs for sys sw ; current; complete; usable

2.4 Desc & specs for packaged apps sw



2.7 List & Desc of all manuals, system & user docs, etc.2.8 Incorp of RFP, proposals, brochures, mktg matls, etc.2.9 Sys Def (5 Rs: Right person; truck; tools; address; time)2.10 Definitions of other terms & Relationship to system


2.12 X-refs to other K provisions & exhibits (inc Biz Case)

DISCLAIMERS:While a tremendous amount of research,analysis and effort has been put intodev eloping and testing this "IT ContractSuccess Model" it is no substitute for youdiscussing your specific case and set of factswith your own counsel/consultants beforeproceeding.

We understand that deliv erables and clauseschange depending in the SDLC methodologyselected. That will be cov ered in our liv ediscussion and in the Q&A session. WSReid


This Model contains 32

contract clause areas.

NOTE: Less than half of these

can be drafted by an IT contracts

attorney alone. The others

require thoughtful input from

CXO(s), CFO, biz domain & MIS

leads/ consultants

Functional Rqmts & Project Mgmt (areas: 3, 4, 5, 12)

Click for full

size view of

all contract

areas: http://www.wsrcg.c

om/PDFs/model_itc

ontracting.pdf





This Model contains 32

contract clause areas

NOTE: Less than half can be

drafted by an IT contracts

attorney alone. The others

require thoughtful input from

CXO(s), CFO, biz domain &

MIS leads/ consultants

PRE GO-LIVE ITEMS (areas: 6,7,10,11,14,15)

Click for full size view of all contract

areas: http://www.wsrcg.com/PDFs/model_itcontracting.pdf





(A) Set the Stage

2. DESC OF SYSTEM (A)

2.1 Component desc/specs hw, sw, nw, media, wire, etc.

2.2 Configuration warranty

2.3 Desc & specs for sys sw; current; complete; usable

2.4 Description & specs for packaged apps sw



2.7 List & Desc of all manuals, system & user docs, etc.

2.8 Incorp RFP, proposals, brochures, mktg matls, etc.

2.9 Sys Def (5 Rs: Right person; truck; tools; addr; time

2.10 Definitions of other terms & Relat’shp to system


2.12 X-ref to other K provisions & exhibits (inc Biz Case)

1. RECITALS (A)

1.1 V’s areas of expertise, experience, etc.

1.2 B’s business & data processing

requirements

1.3 V’s ability or experience to handle B’s

rqmts

1.4 Specification/execution of a quality RFP

process; required V services

1.5 B’s issuance of Request For Proposals

(RFP)

1.6 V’s proposal response to B’s RFP;

feasibility, honest, suitability

1.7 Additional docs or communications

between B & V

1.8 Proposal evaluation factors &

assumptions affecting B’s decisions


36 s 6 m

(B) What IS the Bargain? c. Number of users; Locations





i. Right to make copies, incl bkup/archive copies

j. Growth cap meas'ed in incr tranx process rate

k. Capacity for field modification or enhancement

l. Other V representations

3.6 Performance "-ABILITIES"

SW QA: ['-abilities'] hw, sw, nw, architecture



Surviv- R&R- Config- Util; $ Effect [vs benchmk]

DEVS (Internal): Adapt- Audit- Deploy- Reuse- Test-

Interop- Maint- Perform- Port- Extense- Struct-

Manufact- Trace- Reuse- TEST- Struct-

3.7 Relationship to acceptance criteria & testing


3. FUNCT RQMTS & PERFORMANCE MEASURES

3.1 Desc of biz funct to be performed (or x-ref to RFP)

3.2 Rqmts Elicitation (RE)/Scope Change Process




- Scope change process: proposed, est all impacts,


- Embrace change: Iterative, Incremental, interactive

3.3 Incorporation of Functional Requirements Docs



GAPs/changes; rollout plan; test results; sys.stabil;Go-

Live checklist; rqts change process/tools; defer/tradeoff;


passwords; enabled Ops/ Maint. Groups, etc

3.4 Incorp of V’s proposal(s), website, market’g matl, etc.





37 w 6 m

(C) Project Management 4. PROJECT TIMETABLE (C)

4.1 Definition of project tasks


4.3 Estimating meth used; assumps; update procs

4.4 B’s responsibilities; V’s responsibilities



4.7 B’s right to delay or cancel proj tasks

4.8 Major perform milestones & relat to pymt sched




5. PROJECT MGMT (PM) & REPORTING (C)

5.1 Steering Committee role, structure, makeup, process



5.4 Desc of V’s project team; Descrip of B’s project team

5.5 Designation of V’s PM; Designation of B’s PM

5.6 Determ SDLC METHOD to be used; rules to deviate


5.8 V’s resp for PM; project rpt'g: format; freq; distrib;

detail

5.9 V’s/B's resp: BPR/new proc dev, link, train, test,

approv

5.10 V’s resp to ID, manage, mitigate RISKS, probs, delays

5.11 B’s responsibility to address V's probs/recs in proj

rpts

5.12 B’s responsibility to assist V

5.13 B’s responsibility for project problems or delays


5.15 Remedies for loss/reassignment of V’s Proj Mgr (PM)


38 w 6 m

(C) Project Management 12.19 Personnel/services rates to price chg orders


12.21 Right to benefit of price reductions

12.22 Relat’shp to K remedies


12.24 Offset rights

12.25 Relat’shp to dispute resolution mechanisms

12. PROJECT COSTS & PAYMENT SCHED (C)

12.1 Hw prices, if purchased (incl “bundled” sw)



12.4 License fees for sw

12.5 Training fees

12.6 Maintenance fees for equipment &/or sw

12.7 Fees or charges for other services

12.8 Partial payments tied to major milestones




12.12 Credits or offsets for delays or failures

12.13 Refunds if K is terminated


12.15 No mods/addtl charges w/o written approval





39 w 6 m

(D) Pre- Go-Live Tasks 10. TRAINING (D)

10.1 V’s obligation to provide training

10.2 Qualifications of trainers



10.5 Relationship to timetable

10.6 Relationship to proj costs

10.7 Avail of student matls

10.8 Avail of instructor’s matls & training


10.10 B’s rights to reproduce & use training matls




11. DOCUMENTATION (D)

11.1 Desc of doc types; Docs stds: user, test, system docs

11.3 Relationship to proj timetable & performance measures

11.5 B’s rights to reproduce & to future docs/enhancements

11.7 B’s rights to source code & related docs


6. SITE PREPARATION (D)

6.0 ID general contractor; roles/resp; liens; overall

schd

6.1 Preparation & delivery of site prep specs

6.2 B’s (or V’s) obligation to prepare site

6.3 V’s obligation to clarify specs

6.4 V’s obligation to inspect & certify



6.7 Effect on project timetable

7. COMPUTER CONFIG DELIV & INSTALL (D)

7.1 Delivery of complete equipment configuration


7.3 Access to site



7.6 Diagnostic tests/relation to Accept Test provision


7.8 Remedies for delays in delivery or installation

7.9 Relationship to termination rights © 2006-2011 by Warren S. Reid All Rights Reserved 40 s 6 m

(D) Pre- Go-Live Tasks





- Experi test staff: leads,SMEs, analyst, testers, QA

- Test: sched, training, environ, equip; access

- Test results review: who, when, turnaround time



- Rigor of error root cause id, est to fix, fix process


14.5 Desc of error severity levels/time to repair each

14.6 Escalat Process; SWAT - SW Adjudication Team





14. LOW LEVEL, SYS & INTEGRAT TESTS (D)

14.1 Diagnostic tests of hw, infra, netware



Military; Operat’g Systems (latent error stats avail)

14.3 All manner of tests for funct & '-abilities' incl:

Dynamic tests: ~85% including:

- white/black box; sub-routine; unit; integ, system



- Independ V&V; security; acceptance; beta

- '-ability' (use', scal-, port-, maint-, reuse-,

recover-, bullet, and many more

Static Tests: ~15% including:

- reviews; walk-throughs; inspections


41 w 6 m

(D) Pre- Go-Live Tasks

15. ACCEPTANCE TESTING (D)

15.1 Live or simulated environ; w new BPR

15.2 Desc of test data & prep responsibility

15.3 Desc of test procedures & criteria

15.4 Relat’ship to funct rqts & perform stds

15.5 Period of testing

15.6 Review of test results

15.7 Correction of errors & problems

15.8 Definition of acceptance

15.9 Remedies for failure to meet accept criteria

15.10 Relat’ship to warranty/maint provisions



42 w 6 m

(E) Customize and Convert

9. CONVERSION & OTHER SUPPT

SERVICES (E)

9.1 Data conversion

9.2 Application program conversion


9.4 Assist B with site acquisition &/or prep

9.5 Assist B in acquiring other products/services



9.8 responsibility for trouble-shooting

9.9 Assist to B with development of backup plans

9.10 Assist to B with backup arrangements


9.12 Assist B in develop'g disaster recovery plan


8. CUSTOM PROGRAMMING SERVICES

(E)

8.1 Incorp of funct processing rqmts docs

8.2 V’s obligation to develop custom apps

8.3 Relat’shp to stipulated perform measures

8.4 Relat’shp to proj timetable


8.6 Review/approv by B of detail design specs

8.7 Specification of programming stds

8.8 X-ref to system, program, & user docs stds

8.9 Specification of change order procedures

8.10 X-ref to system/acceptance test provisions

8.11 V’s resp for acceptable unit/sys test procs

8.12 V’s oblig to deliver source code/related docs





43 w 6 m

(F) Personnel

13.1 V’s staff qualifications/B’s approval/denial

rights; Staffs’ evals; courses taken;

experience & expertise

13.2 Application certified/certificates; Updated

CMMi rating

13.3 Periods of Availability





13.8 Ability to pass on V's staff salary raises to B


44 s 6 m

(G) Post Go-Live Services

16. WARRANTIES (G)

16.1 V’s financial condition

16.2 Hardware warranties

16.3 Software warranties

16.4 Service warranties

16.5 Pass through of third party warranties


16.7 Start date(s)/length of warranty period(s)

16.8 Relat’shp to maintenance provisions

16.9 Scope of warranty obligations

16.10 Remedies for failure to meet warranty obligs

16.11 Assignability of warranties

16.12 Relat’shp to disclaimers & Limits of V’s liabs


45 s 6 m

(G) Post Go-Live Services



17.16 B’s rights to perform maintenance

17.17 B’s rights to maintenance manuals

17.18 B’s rights to maintenance training

17.19 Limits on B’s rights to perform maintenance


17.21 V’s obligation to coordinate third party maint

17.22 B’s right to get maint o/s principal maint per’d



17.25 B’s rights to future enhancements

17.26 B’s rights to assign maintenance rights

17. MAINTENANCE (G)

17.1 Start date(s) & length of maint period(s)

17.2 V’s termination rights


17.4 B’s renewal rights for guaranteed period




17.8 Classific of types & criticality of maint probs







46 w 6 m

(H) SPECIAL OUTSOURCING CONSIDERATIONS

33.1 BIZ CONSIDERATIONS & RISKS (H):

33. 1a “59% of all O/S Ks fail” (Compass '05; Forrester '07)

33. 1b SOX/Regs adherence; No subbing to China

33. 1c Think w/cost 70-80% less but only profit 20-30%.

In fact, most report 1st year savings of 0%

33. 1d 'Please You; Don’t Ask?'; 90% of time w/say "OK"

33. 1e Time Zone diff; Infrastructure poor; 22 official langs;

too many polit parties; Turnover by “Group/Floor”

33. 1f Security/privacy laws; cyber crime; terrorism

33 .1g Must have both orgs' staff on both sites; Build trust

33. 1h Define Success (iterative, incremental, interactive)

33. 1i OS in international market w/o int. ops experience

33. 1j Not using variety of perspectives in selection process

33. 1k Using poorly devel/documented serv/prod spec

33. 1l Not doing biz/financial due diligence on OS candid

33. 1m Insufficient knowledge of OS capacity limits

33. 1n Not resolving ops issues b4 move to K legal aspects

33. 1o No full com plan in effect, incl escal, reg sch meets,


47 w 6 m

(H) OUTSOURCING CONTRACT CONSIDERATIONS

33.16 K provision to secure appropriate supplier talent:

33.17 K provision to limit sub’s use (e.g., to China)

33.18 Limit unnecessary charges: data recovery;

re- perform services

33.19 Baseline OS resources for ongoing

support/projects to allow B to reprioritize

services and reassign OS resources

33.20 K s/require OS to track (at min): asset

type/location, ID, ser/model #s, in serv date;

sw/hw vers/upgrades; if own, lease, license &

fin resp party; Apps tied to server; Changes

33.21 Coop Obligations: betw OS/C/3rd parties; staff;

facilities, equip, sw, doc, biz proc access;

additional OSs;

33.22 K $$ reduct’, commits, proc improv; stds imple

33.23 SLA improvm’ts (esp if SLAs met but service unsatis

33.24 Termination: Termination assist: doc plan;

staff; all equip, sw, matl, data, 3rd pty Ks/ tools

to provider services; train; C/ 3rd party in equip, sw,

data, same; Right to employ OS staff;

Right to purchase equip/assign leases

33.25 Attorney’s role does not end when deal

signed!

33.2 CONTRACT ("K") CONSIDERATIONS (H): © 2007 Michele Kane/Wendy Gross All rights reserved

33.2 Change process: biz, staff, tech, ind stds,

laws, regs, efficiency gains. Limit OS

ability to charge for such changes

33.3 Train both Cust & OS mgt & opns on O/S K

33.4 Proc to request new service, change, projs

33.5 Right to use 3rd pty OS 2 in-/re-source


33.7 O/S obligs to pace/refresh w tec advances

33.8 SLAs: how they wk, credits, impr oblig/chg

33.9 Commitments regarding supplier staff


33.11 Ownership of custom devel & work prod

33.12 Term, termination assist services/rights

33.13 Min retent’n 4 transitioned/LTerm key Ees

33.14 Diff for single silo OS than big bang tranx

33.15 Keep staff knowl: apps, biz, tec, OS procs


Some Important Legal Clauses/Thoughts In Virtually ALL Contracts (IT and Otherwise)

Assumptions and Goals

Do You Really Want to Avoid Litigation?

Attorneys’ Fees

Don’t Do A Contract Until You Know What Is Being Delivered

Venue

Choice of Law

Under the Subject Matter

Indemnification

Alternative Dispute Resolution

Arbitration


49 s 2 m

SUMMARY

1. Scratched underside of the Iceberg

2. Both sides Lose in Litigation: See it from both sides

3. Contracts allocate risk: Get it in writing Up front

4. Negotiate for “Intention”: NOT “Principle!”

5. Here are our needs! U devel clauses! We select best!

6. Be Flexible: everything not = in import or linear

7. If you want to end w Success, start w Success

8. You NOW know the risks! Manage them!

9. Perform OUTSTANDING Reference Checks

10. Follow good methodologies

11. Measure: Quantity & quality, Progress & Status

12. No Panaceas: Consider SWAT, Mediation, ADR

50

© 2006-2011 Warren S. Reid All Rights Reserved 50 w

10 m

AFTER YEARS OF EXPERIENCE:

THE GOLDEN ANSWER!

d(y)h : f(y)p + (l)+

(c) = P2R


51 w 2 m

AFTER YEARS OF EXPERIENCE:

THE GOLDEN ANSWER!

d(y)h : f(y)p + (l)+

(c) = P2R


52 w 2 m

QUESTIONS/COMMENTS

Warren S. Reid, Managing Director PH: 818/986-8832

E-mail: [email protected]; Website: www.wsrcg.com

53

WSR CONSULTING GROUP, LLC Management, Technology, e-Business & Litigation Consulting

3/7/2011

For More Written Materials, Articles & Full Size Versions of the Success Models, please visit:

The WSRcg Learning Center for IT Excellence

http://wsrcg.com/learn_introducingmodels.php

For large size views of the “IT Success Models” go to: http://www.wsrcg.com/PDFs/model_riskipedia.pdf

http://www.wsrcg.com/PDFs/model_requirements.pdf

http://www.wsrcg.com/PDFs/model_RFP.pdf



53

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The Critical Roles of the Systems & Software Professional ... · Standish Group: Chaos Study Results 2004+ 3 w CHAOS Summary 2009: + success = 34% (delivered on time, budget, on target)