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Stories by Matthew Karlyn and Michael Overly

How to protect your company from vendors who don’t deliver

When structuring IT transactions, CIOs and vendors frequently focus more on the positive aspects of the relationship - those areas that will help both parties achieve their business objectives - and less on what would happen if the relationship fails to meet those objectives. At the beginning of a relationship, scenarios such as the supplier going out of business or failing to perform, or your company deciding to change direction, seem so unlikely that many organisations fail to plan for them. However, economic volatility coupled with recent high-profile cases are forcing CIOs and vendors to focus more on protecting themselves through their contracts.
Consider the recent case of British Sky Broadcasting (BSkyB) v. Electronic Data Systems (EDS). In January, Britain's high court ruled that EDS had misrepresented is capabilities as well as underestimated the time and cost to complete a customer relationship management (CRM) system. The court concluded that EDS' representations were fraudulent and awarded BSkyB £200 million (US$288 million). The judgment shows that statements by a vendor may be taken at face value.

Written by Matthew Karlyn and Michael Overly15 June 10 22:00