Posts Tagged ‘SLA’

Controlling Support Costs

Monday, March 16th, 2009

By far the most frustrating problem I face is where a client is locked into an expensive long-term support arrangement with a software product supplier and receives little value for money. Given that the contract is signed and sealed, and significant investment already made in the product, there’s little space for re-negotiation - moving to a different product is not cost effective.

The problem is that in addition to the initial support fee many suppliers will include annual increases to reflect changes to the software; any bespoke elements therefore not only incur an initial fee, but on-going additional support costs. This can lead to exorbitant costs in the future.

Before finalising the purchase of a product buyers are in a strong position and have plenty of opportunity to negotiate support costs.  It is therefore essential to fix favourable support terms at the outset including Service Level Agreement (SLA).  Where possible a support cost should be agreed based soley on the license fee of the product, and not professional services or bespoke changes. An annual increase based on inflation is however not unreasonable.