By: Natalie Lias
When an organization commits to a software solution and begins the formal purchase process, often the IT architecture and infrastructure specialists who have been critical to evaluating and specifying the solution are not included in the process. The effort IT specialists have put into creating business requirements and ensuring the software’s capability to deliver is considered concluded, and the final purchase process is turned over to procurement in conjunction with the legal department. Unfortunately, “throwing it over the wall,” while typical in many organizations, is a disaster waiting to happen when considering complex software purchases.
The procurement and legal teams are typically experts in negotiation, indemnity, intellectual property, and other issues which are common across strategic purchases for your enterprise. These skills are critical and necessary for the successful culmination of a software license purchase, but they are not sufficient! Although there are exceptions, for the most part, dedicated procurement staff lack detailed knowledge of IT and software requirements.
This lack of expertise can have disastrous results when the specific terms and conditions of a contract are being negotiated. Because typically procurement staffs are evaluated internally on the level of discounts they achieve, they may accept licensing limitations from the software vendor that seem harmless but can seriously undermine the architecture and functionality required by the IT technical personnel who originally created the purchase requirements!
For example, a purchasing professional, in the course of negotiation, may accept limited use rights for a particular license order. While this might be acceptable to the IT business owner, who is purchasing the licenses for a specific purpose, often lower-level IT staff are not made aware of these limitations. Instead, they are simply told that “new licenses are available,” so the restrictions and limitations get lost in translation. This can be a costly mistake if the vendor later conducts an audit and finds restricted license types used for general purposes.
What’s the solution? Certainly not to have your database administrators involved in discussions with legal and procurement (a recommendation that would be sure to irritate all involved). Rather, the software purchase business owner needs to understand that software license rights that are being traded away to achieve a larger discount may hobble the enterprise’s flexibility to use licenses and may create a software compliance nightmare. Non-standard license terms are certainly one way to achieve larger discounts and greater software value, but these advantages need to be vetted by the IT staff who will be implementing the software to ensure that after all their hard work, they can still get their jobs done.