ReSolution Issue 26, December 2020 | Page 11

Resolution November 2019

B. Does the negotiated IT Project contract align with the ensuing IT Project delivery trajectory?
• There was a material response that IT Project Contracts, as negotiated, deviate from the ensuing IT Project delivery trajectory and are too rigidly negotiated. In addition, rigid and contested Change Control Procedures are usually the only process to deal with new or unforeseen circumstances discovered by a Customer or Supplier.
• A dominant number of survey respondents believe that an IT Project Contract should have terms that provide flexibility for the parties to address such circumstances contractually.
C. What behaviours are observed when an IT Project misalignment and IT Project Contract dispute arose?
• Initially, often a lack of awareness that a misalignment or dispute is occurring.
• Once it is known, fear, positional and conflict orientated behaviours are demonstrated.
D. What was their experience of dispute resolution processes used?
• Dominant dispute resolution services used are Negotiation (ie re-negotiation) and Mediation. There was general satisfaction with the outcomes these processes delivered.
• Litigation was largely viewed negatively, it being fault based, cost intensive and relationship ending.
• Negotiation and Mediation are optimally used as early as possible at the point where trust and respect (absent power leveraging) are present and the dispute resolver exhibits analytical and facilitative skills to unlock entrenched positions.
• It was clear a neutral dispute resolver is preferable to a Customer appointed audit reviewer.
E. Prima facie recommendations arising from the DR Research for adoption in IT Project contracts are:
i. IT Project Contract negotiation:
• There is need for more effective alignment in the negotiation of an IT Project’s terms with the material IT Project risks highlighted above.
• Proposed is the inclusion of an overriding acknowledgement or guiding principle that: (i) the parties have used their reasonable efforts to properly scope customer Requirements and Supplier Solution (excluded here are represented and or warranted subject matters); and (ii) if it is discovered, by one party or both, that the scoping exercise was not accurate or sufficient then, for specific agreed areas, the parties may review, discuss and renegotiate these areas (on a without prejudice basis).The parties can renegotiate themselves or have recourse to a mediator or a dispute review board (as set out below). Effectively this would involve by agreement a short suspension of milestone delivery dates and a time out to review, resolve and unlock.
• These contract terms are an alternative to the historically rigid and often contested Change Control Procedure terms.
ii. Modified DR Services specifically for IT Projects:
a. Tailored mediation:
• In IT Project Contract governance, there is a specific agreement for the use of a Mediator to review, analyse and facilitate the resolution of the misalignment or dispute for specific IT Project phases and their activities, for example, Requirements Analysis. Of course, the parties can refer other subject matters to the Mediator.
• The Mediator should have an adequate understanding of IT Project procurement, development methodology (eg Waterfall or Agile or a hybrid or other) and the Solution.
• The Mediator’s costs would be equally shared between the Customer and the Supplier and be included in both the Budget and the Supplier’s Bid costs and/or Fees.