• silicon.com
• Technology
• IT Services

By Addleshaw Goddard, 12 February 2007 12:45

COMMENT

Mediation: Another means to settle disputes is the use of mediation. This is where all relevant parties get in a room to hammer out the issues, with the assistance of a mediator. This form of shuttle diplomacy tends to work very well.

As mentioned, both parties can get very entrenched in outsourcing agreements - and it is much easier to be belligerent on email or over the phone. When sitting down at the table together, or engaged in the same process, it usually becomes easier to move towards a resolution. It can also provide a means of saving face for the different people who are involved - often the mediator is blamed for any concessions that were made in reaching settlement.

Ongoing management: To avoid disputes, sensible management of the contract is also needed. This may seem an obvious point to make but it is often the case in public sector outsourcing that the people who are involved in these deals may never have been involved in an outsourcing project before.

Also because the team which signs up to the contract is not necessarily the same team that runs it, the people who are involved in the management of the outsourcing need to be up to speed on the main contract provisions and understand where the real risks lie.

Many an IT project gets delayed through no fault of the customer. It's a natural thing to ask the supplier for an explanation and be presented with a plan B. The client team may not realise that each time they agree to work to the new project plan, it often becomes the new contractual timeline against which claims for delay will be assessed - even if by the end the supplier is years behind the original schedule. Risks like this need to be understood. It is one of the reasons why client delivery teams are encouraged to undergo contract management training at the outset of a project.

Despite the conflicts and disputes that arise, there is no doubt the technology and outsourcing projects that abound in the UK's private and public sectors are amazingly innovative and essential in the UK's evolution.

But in order for these projects to succeed and to limit potential failure, client companies need to be aware how to limit dispute fallout. They need to sit down at the outset, work out objectives and develop a contract that will form a protective layer around the project. And it must be remembered that all the measures described above - adjudication to mediation - are just a means to an end, not an end in themselves.

Mark Amsden is the national head of the IT disputes group at law firm Addleshaw Goddard.