Are you signing your soul away?

Posted by Anne Hall on

Businesses are recognizing the need to transform and change to keep up with both established competitors and to cope with either brand new competitors or with parallel companies which are branching out into their traditional space.

Unfortunately, while many businesses are recognizing the need for transformation, they are either inadequately prepared for the level of transformation that’s needed or are unwilling to put in the resources they need to adequately realize that change.

 

Transformation requires a degree of looking both forward and laterally, with an organisation imagining not just what their space will look like in five or ten years’ time, but what the spaces around them will look like as well, and the possibilities for growth into that lateral market. There are also difficulties which businesses face when the rate of change is faster than they can cope with or which experienced people in the company are willing to accept.

This leaves businesses in a strange position – where they are having to rush some aspects of their business to be able to keep ahead, and are lagging behind in others. Unfortunately one of the areas in which companies tend to believe they can easily save time and effort is in their agreements.

 

Previously, with long-term licenses, expensive hardware systems, and customized software, businesses had to use a robust assessment process and negotiations when dealing with their suppliers.

But as many formerly licensed software moves to SaaS, data storage moves from on-premise servers into the cloud, and customized software has been transformed into apps, these robust processes have fallen away.

This is exacerbated by electronic contracts which are sent via an email link, and only require a tick in a box or a click of a button to accept. There is no longer a negotiation – indeed, many businesses aren’t even reading the contracts (and yes, these linked terms of service are contracts) before they “sign” them – and sign away their rights.

 

Businesses may find themselves acquiescing to things which, if they actually read them, they would never agree to without clarification. Clauses involving access to data, use of confidential information and security of that information, and even ownership of content and what should be customer-owned intellectual property is sometimes listed in favor of the supplier.

Essentially, the customer ends up agreeing to take on all the risk in the deal, and pays for the privilege.

 

While larger organisations may be in a better position to challenge these contracts, the time and expense can seem not worth it, especially in comparison with the relatively meager cost of the service. It is up to them to understand the value of their data and their intellectual property, and at least read the contract.

But even smaller businesses can make negotiations and properly understand the risk they are signing up to. If a company knows what should and shouldn’t be in a contract, they are better prepared to negotiate certain clauses, refuse others, and even come to a collaborative outcome with the supplier.

At the very least, they can stay away from suppliers that are actually predatory – because what a business doesn’t pay in cash upfront, they may end up paying far more for later.


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