‘If it ain’t broke don’t fix it.’ So the expression goes. Let’s look at this for a moment.
I’ve got a balcony off of my study. On a hot day, it’s nice to open the doors and go out there. The balcony floor boards seem to need repair, they sag and need to be re-stained.
There is a safety issue for sure. What if my teenage kids had friends over and they all went out there. Would it break? Is the balcony an accident waiting to happen?
Okay we decided the balcony was ‘broken’ and now it has been fixed. We did not wait for it be ‘officially broken’. I am relieved. It feels safe now (and looks much better!).
Are your agreements like this balcony? Not exactly safe but not exactly broken either. Do you know that your agreements need to be updated but don’t think they’re quite ‘broken’ enough?
A couple of reasons that IT suppliers carry on using out of date agreements
It’s common for suppliers to realize their agreements need updating. It’s also common for updating of agreements to be low priority. The ‘ain’t broke, don’t fix it’ approach is applied.
There’s no time for this task and also you want to avoid the cost. Meanwhile the agreements are getting more and more out of date. And more and more unsafe. The agreements are not exactly broken but nor are they safe.
Probably the underlying cause of out of date agreements being used by IT companies is that the value of good agreements is not clearly understood. But that’s another topic, for another article. Or now let’s say the reasons are lack of time and lack of budget.
Just like my balcony. We had other priorities for our time and money. Only once I turned my mind to the risks of an unmaintained balcony, the need to fix it made it a high priority.
Why you should start seeing your old agreements as unsafe (and risky)
The main reason old agreements are unsafe and risky? Time moves on. Your business changes.
Let’s say you have a SaaS product. Previously you provided on-prem software. Maybe you still do. But you also now have a SaaS product. Can you use the same agreement for both? Can you make a few changes to the on-prem version and use it for SaaS? Here’s two reasons this is not a good idea (and is an unsafe, unwise use of your time):
- Upfront Risk: for a start, your customers can raise issues with the agreement, which delays signing. So there’s a time cost for you in addressing these issues with them;
- Ongoing Risk: secondly, issues can arise later. Your customer could, for example, suspend payment because the service commitment was not met. Unfortunately, the exception factors (when the service commitment does not apply) are in their favour not yours, even though it’s your agreement! But it’s too late. And you want to retain the customer.
Whether you are an independent software vendor (ISV), a managed service provider (MSP), a professional service provider or a reseller, there are multiple examples of both types of these risks, the Upfront Risk and the Ongoing Risk.
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