Suppliers avoid paying for failures


Suppliers avoid paying for failures

Will Hadfield

Companies often allow their suppliers to avoid financial liability when IT projects run into problems, according to Allan Watton, managing director of the Best Practice Group.

Watton told the IT Directors Forum that suppliers presenting themselves as specialists had a duty of “reasonable care and skill” under English law. This means that IT users are entitled by law to be paid for project delays or the failure of the project to meet business objectives. Suppliers have to tell users what they are going to provide, what they are not going to provide, and what consequences the project will have on the rest of the business.

Although firms automatically benefit from legal protection, most of them remove that protection by changing business objectives, processes or implementation plans after the contract has been signed, said Watton. By doing so, IT users leave themselves liable to the costs of putting the project back on track.

Often staff, in trying to get a project back on track, completely undermine any common law protection their employers have because they deviate from the contract terms when they encounter problems.

Watton laid out six steps for users to follow when projects go wrong:

● Read your contracts
● Document every problem
● Create a process for managing the project
● Set clear milestones to resolve the problem
● Stop paying the supplier
● Treat all project information as potentially false.

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