How can you negotiate software contracts that meet everyone's needs?
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Software contracts are essential for defining the scope, quality, cost, and timeline of any software project. However, negotiating them can be challenging, especially when you have to balance the expectations and interests of different stakeholders, such as clients, developers, vendors, and users. How can you negotiate software contracts that meet everyone's needs and avoid conflicts, delays, and disputes? Here are some tips to help you.
Before you start negotiating, you need to understand the context of the project and the contract. What are the goals, requirements, risks, and constraints of the project? What are the legal, ethical, and technical standards and regulations that apply? What are the roles, responsibilities, and expectations of each party involved in the contract? How will the contract be monitored, evaluated, and enforced? By answering these questions, you can establish a clear and realistic baseline for the negotiation and avoid misunderstandings and assumptions.
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Alok Kunwar
IT Operations Service Delivery Manager for an Educational Institute
You will not be able to meet everyone's need in any negotiation in short term but yes, you can do it in long term. 1. One must have capability of recognizing what is short term and long term objectives are from that "Software Project". Take support from domain experts in your organisation. 2. Identifying the stakeholders (your and client side) who are looking at short term goals and long term goals. 3. Address these stakeholders separately if you can. First win internal stakeholders, they are tougher than clients. 4. If all stakeholders (client side) are together create a story and communicate what they will get and when they will not get. Keep in mind, never tell what you can give. This will give 90% success :-)
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Tom Haveman
Head of Product Engineering - Delivery & Services @ IKEA
I agree, in my opinion it’s important to be clear about what capabilities you are expecting to get out of the agreement and what you will pay for them. Also be clear about how you like to monitor the performance of these capabilities you acquired.
Communication is key for any successful negotiation. You need to communicate clearly, respectfully, and assertively with all the stakeholders involved in the contract. You need to listen actively, empathize, and acknowledge their perspectives and concerns. You need to use appropriate language, tone, and channels for different situations and audiences. You need to document and confirm all the agreements and changes made during the negotiation. And you need to follow up and provide feedback regularly throughout the project lifecycle.
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Mateen Ahmad khan
Founder - CEO at Rapidfire Softwares, Founder at Kirayeper, Co-Founder at Trady.pk
Effective communication fosters clarity, preventing misunderstandings and promoting cooperation among stakeholders in the software contract negotiation process
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Jose Lainez
General Manager - Ecuador en AlfaPeople
Communication is really important, not only verbally on contract negotation; Also in how you make your comments, corrections on the document; You must always explain why you are including a new text or makinga a change
One of the most common mistakes in negotiation is to focus on positions, or what each party wants, rather than interests, or why they want it. This can lead to conflicts, impasses, and win-lose outcomes. Instead, you should try to identify and address the underlying interests of each party, such as their needs, values, motivations, and fears. By doing so, you can find common ground, create value, and achieve win-win outcomes.
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LAZARD TATCHI
Cloud Solutions Architect | PMP, ITIL, BIG DATA, CISSP, CFA Certificate in ESG Investing, OKR, Product Management, VC & PE Investing
Applying OKRs in negotiations clarifies and aligns goals by prioritizing mutual interests over fixed positions. Objective 1 : Find Common Ground - list their top business needs. - Identify at least two mutual interests. - Propose compromises reflecting these interests. Objective 2: Maximize Joint Value -Draft an agreement beneficial to all. - Create three unique, joint-value solutions. Objective 3: Forge Lasting Agreements -Establish a post-deal communication plan. - Schedule a six-month contract review. OKRs can help streamline negotiations to unify parties and forge lasting, beneficial agreements.
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Mateen Ahmad khan
Founder - CEO at Rapidfire Softwares, Founder at Kirayeper, Co-Founder at Trady.pk
"Focusing on interests, not positions" is a negotiation strategy popularized by the book "Getting to Yes" by Fisher and Ury. It means delving deeper into the underlying needs and motivations of each party involved in a negotiation, rather than fixating on rigid, opposing stances or positions. In the context of software contract negotiations, this approach entails understanding why each party seeks specific terms or conditions. It involves asking questions, listening actively, and empathizing to uncover the underlying concerns, goals, and priorities. By identifying these shared interests or complementary needs, negotiators can work together to find creative solutions that satisfy everyone.
Another mistake in negotiation is to be rigid and inflexible, or to assume that there is only one possible solution. This can limit your options, reduce your leverage, and increase your costs. Instead, you should be flexible and creative, and explore different alternatives and scenarios. You can use techniques such as brainstorming, scenario planning, and trade-offs to generate and evaluate various solutions. You can also use criteria such as feasibility, acceptability, and sustainability to compare and select the best solution.
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Sridhar Rajagopalan
Entrepreneur. Coach. Trainer. Customer Experience. Intelligent Automation. AI & Analytics. Agile Product & Portfolio Management.
Use of Agile empirical methods provide a great way to avoid one size fits all, ocean boiling contracts. Flexibility in approach, pricing, scope, and timelines foster creativity to solution and effect great outcomes.
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Ashish Jaiswal
Senior Engineering Manager (Agile Leadership, Business Strategy, Technology, and Architecture) PMI-ACP
Being flexible and collaborative helps you understand your customer better and build a good rapport with them. Per Agile values, customer collaboration is preferred over contract negotiation. In business-to-customer organizations, contract negotiation is often an internal process, leaving room for collaboration. Collaboration produces better and more useful products.
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Conflicts and emotions are inevitable in any negotiation, especially when there are high stakes, complex issues, and diverse stakeholders involved. However, if not managed properly, they can derail the negotiation and damage the relationship. Therefore, you need to manage conflicts and emotions effectively, both yours and others'. You need to stay calm, rational, and respectful. You need to avoid personal attacks, accusations, and blame. You need to address the root causes of the conflicts and emotions, not just the symptoms. And you need to seek constructive feedback, learn from mistakes, and improve your skills.
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Salman Zafar
Founder & CTO @ Securotek | Project Management, Technical Lead
If there are accusations and blames at negotiations of the contract itself, it’s an alarming situation. Better reconsider the approach. With diverse stakeholders it should be less noise and more calm but suppressed feelings, which actually need to be cleared out quickly. In my experience, most resistance is caused by individuals who are not well aware of expected results or are simply against the change. Identifying the cause will guide on how to address it. So patience is the key….
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Mateen Ahmad khan
Founder - CEO at Rapidfire Softwares, Founder at Kirayeper, Co-Founder at Trady.pk
Skillful conflict resolution and emotional management maintain a productive negotiation atmosphere, fostering constructive dialogue and agreement on software contract terms.
Trust and rapport are essential for any successful negotiation. They can enhance cooperation, collaboration, and communication. They can reduce uncertainty, risk, and resistance. And they can foster long-term and mutually beneficial relationships. To build trust and rapport, you need to be honest, transparent, and consistent. You need to show respect, appreciation, and recognition. You need to deliver on your promises, meet your deadlines, and maintain your quality. And you need to seek feedback, learn from mistakes, and improve your skills.
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Aadithya K.
Client Partner | Business Retention and Expansion | Delivery Excellence
One of the critical aspects I have seen in negotiating a contract is transparency. This is the fundamental pillar of creating trust and avoid conflict in the future. This transparency can be with respect to the contracting terms, capability of team members identified, and commitment of delivering work. In case of newer technologies or programs that are new to both parties, openness to jointly uncover and learn during the engagement has helped in some cases. In my past experience, over committing any of the above mentioned aspects had detrimental effects in the long term partnership and trust
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Mateen Ahmad khan
Founder - CEO at Rapidfire Softwares, Founder at Kirayeper, Co-Founder at Trady.pk
Establishing trust and strong relationships with all parties enhances collaboration, making software contract negotiations smoother and more mutually beneficial.
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Fulvio Angelelli
CTO at IoT Domus
I would say there are few things missing in the article. The type of contract (I.e. fixed price, time and material, …) Is very important during negotiation. As it is also the scope of the project. Fixed scope? How well defined? Variable? This also links to the project plan and the choice of what methodology to use. This is the stage where most problems start so to get it right is key. And to get accurate estimates it needs lot of technical work too.
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Vivian Nasieku
Product Management | Business Analysis | Project Management | Software Testing Professional
Alot has been covered already but I would add ensure collaboration with relevant internal teams in the negotiations who will bring different perspectives. And of course think long term partnerships, because any service provider you bring onboard will be an integral part of your customer journey and therefore a great relationship from the start will help going forward.