In terms of the 8 different payment schemes I was specifically referring to what we call 'payment curves' (see attached graphic) as opposed to payment regimes such as cost+ (time and material), fixed price, cost + fixed fee, etc. In this light these are grouped into 5 main families with a couple of variations inside each. These are as follows:
- 'all or none' payment curves
- Linear payment curves
- Non-linear payment curves
- Alternative payment such as demerit point and visual payment curves
- Matrix payment curves
The intent of this discussion is to simply highlight that the choice of payment curve, similar to the choice of performance measure and level, can have a significant impact on the success (or otherwise) of the overall performance management framework. My blog (www.performancebasedcontracting.com) has 3 posts specifically on this topic including the graphics.
I hope this helps and answers your questions. However, please let me know if you have any further questions.
Hi Brian. Liability, indemnity etc are common terms which reflect the inherent deal risk or at least the desire for risk allocation. However, the rubber hits the road when you look at the Statement of Work (SOW) and Service Level Agreements (SLAs). The SOW is where the buyer/supplier either is fully informed about the requirements, roles/ accountabilities, and risks, hence, whether they have to factor in a contingency for risk (which is defined in ISO31000 at 'the effect of uncertainty on outcomes'). The more uncertainty then the more risk and the more contingency the supplier will typically build into the price. Then the SLAs typically attract 10-15% of contract value'service credits' for non-performance (the intent is to reflect the value of the margin). Depending upon how tough or unrealistic these are negotiated will also impact how much contingency the supplier will try to add in to the price. Trust this helps you Brian
Hi Bruce - your post and the efforts of Tim, Paula, Christine and Andrew deserve more than zero responses, so here goes.
I do like how the paper encourages us to take a different mindset to the usual "here are our standard contract terms". It's also great that it helps us think about what are the crucial measures / outcomes that we need to think about - like uptime and the remedies. It's great to have some of these issues and risks highlighted so we can include better milestones and measures of success.
As a practitioner, and I've said it before in the forum, I do worry that there's some real thinking missing when I see some of these about whole of like costs involved with data transfer at the end of the contract. There's a lot of great programs that say they can repurpose and reformat the data, but I've found that there's still a lot of cost associated with that, and in the original approach to market, I've seen few demonstrate any real cost in their procurement plans. We can't expect the IACCM team to do it all though !
• Devant Limited
Hi, I've recently been negotiating on the Supplier side and have found that customer's want to pay a low price, benefit from the flexibility of SaaS pricing but then want to negotiate hard on every single detail! A particular challenge has been the demand from Customers to put every new release / update (however small) through extensive UAT. This clearly challenges the agile & flexible nature of SaaS and the one-to-all model. A number of SaaS suppliers are also relatively new and growing businesses - my experience is that many large corporates want to take advantage of this.
Thanks for preparing this paper as it articulates the challenges and benefits of 'as-a-service' well.
I would expand to the inclusion of customer name/logo use in marketing material as there would typically be some sort of agreement prior to such marketing material being used. Maybe strike the language or amend to clarify?
• Philips India Limited
I have had experience when we signed non-binding MoU for JVs. The most likely scenario would be that the JV partner may like to advertise to the greater world that they have signed on a path breaking MOU etc., especially if these partners are listed entities. So its advisable to make it explicit that disclosing the existence of agreement covers not just "verbatim" disclosures, but other modes as well - including social media...unless explicitly agreed between the parties.
I agree with the other replies here, the NDA should cover marketing material. It's common courtesy to check the other party is ok with this being shared and customers I have had have explicitly blocked this as a company policy.