IT contracts: Prescriptions

previous page:What vendors expect...PrescriptionGiven the importance of expectationson the success of projects, much attention should be given tomake sure that they are met.

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What vendors expect...

Given the importance of expectations on the success of projects, much attention should be given to make sure that they are met. The aim is to reduce the potential for disputes before they arise.

Prof Ang and asst prof Koh have laid out a six-step process to manage an IT contract effectively and provided suggestions on each of the steps:

  1. Develop a good business case
    Clients: Provide clear specifications, understand your requirements.
    Vendors: Scope the project accurately.
  2. Determine fair compensation
    Clients: Understand that vendors are in business to make a living. Underpaying them might pressure them to cut costs in other ways - you get what you pay for.
    Vendors: Go beyond meeting specifications. Identify and price services specifically.
  3. Build strong relationships
    Both sides have to make an effort to build a strong team that works together toward a common goal; ensure that everyone is treated equally, whether your employees, or not.
  4. Manage human resources
    Clients: Carefully evaluate the quality of staff assigned to your project. Request the right to review and approve vendor staff. Assign your own best to the project, relieving them of as many operational duties as possible, so that they can work on the project full-time.
    Vendors: Negotiate with client top management to request for staff that you can work with. Try to reduce interruptions to your client personnel by physical re-location during project work.

  5. Provide project leadership
    Determine early if the client or vendor leads and directs the project.
    Clients: Ensure the vendor, understands his roles and responsibilities clearly. Define yours too. Reduce ambiguities and avoid critical activities being overlooked.
    Vendors: Convince the client of the need for their active involvement. Engage them in ongoing discussions, don't surprise them.
  6. Ensure knowledge transfer
    Knowledge transfer expectations should be explicit in the contract. Specify details of the skills & knowledge expected to be transferred. Insist on proper documentation as mechanisms of transfers.


Further details are included in the full release of their study, published in the book Effective Management of IT Disputes, launched by SITDRAC.


About the authors

Associate professor Ang Soon is the head of the Division of Strategy, Management and Organization (SMO); and Director of the Human Resource RoundTable (HARRT).

She is a recognized world authority in her research on the managing of information technology professionals. Prof Ang is the principal researcher on the project for the Singapore IT Dispute Resolution Advisory Council (SITDRAC) that examines the issues and challenges facing organizations when they outsource for IT services in Singapore. She is also the principal researcher for the Information Technology Management Association's Annual IT Salary Survey since 1996.

In addition, Prof Ang has served as the principal researcher/consultant for the National Computer Board for developing the new core skills and competencies of outsourced IT organizations. Prof Ang also served as a consultant researcher for other corporations and MNCs, including British Petroleum, Housing and Development Board, National Computer Board, National Computer Systems, Oversea-Chinese Banking Corporation, and Singapore Airlines.

Internationally, Prof. Ang has won two prestigious Best Paper awards in Human Resource Management of IT Professionals at the U.S. Academy of Management Meeting at San Diego, and in Information Systems Outsourcing at the Hawaiian International Conference on Systems Sciences (HICSS).

She has completed a number of significant research projects on IT sourcing strategies of the United States banking industry, contracting processes of software development outsourcing, IT employment outsourcing, and failures in outsourcing.

These projects have been documented and published in top international refereed journals in Computer Science, Information Systems, and Management such as Academy of Management Journal, Social Forces, Communications of the ACM, Information Systems Research, Organization Science, MIS Quarterly, and Journal of Organizational Computing.

Assistant Professor Christine Koh obtained her Masters of Science (IS) with the Claremont Graduate University in 1996 and is currently pursuing her doctorate studies. Her research interests focus primarily on human and organizational issues in systems implementation and vendor management. Prof Koh was a researcher on the project for the Singapore IT Dispute Resolution Advisory Council (SITDRAC) that examines the issues and challenges facing organizations when they outsource for IT services in Singapore.

Additionally, she has been involved in other IT projects such as the Information Technology Management Association's Annual IT Salary Survey. Her research papers have been accepted at international conferences such as the International Conference on Information Systems (1999) and the U.S. Academy of Management Meeting (2000), and published in the Journal of IT Cases and Applications.

Prior to joining the university, she has worked as an auditor in an international public accounting firm, and as a business analyst in a major computer firm, taking care of the development and planning of all the accounting information systems for the finance and planning division.