258 Part III: Executing Your Software Project Plan (My web server)
258 Part III: Executing Your Software Project Plan Payment terms: Should you pay the entire purchase price at the contract signing? Nope. Most contracts involving software are structured so that payment occurs in stages. Typically, some portion of the purchase price is paid with the signing of the contract, and other portions are payable at certain points during the installation and implementation. Some usual pay point triggers are At product delivery At initial installation Upon first use After completion of installation At product acceptance Graduated payment works for both sides of the agreement; the vendor gets payments at various milestones, insuring that he gets income from his investment in his product to help cover his costs; the buyer gets to hold on to his capital longer and has some leverage to insure that the vendor continues to provide the product and services he has agreed to provide. Nothing says leverage like withholding payment for incomplete or inadequate services and products. The final payment, usually at product acceptance, happens when both sides agree that the work was completed satisfactorily and the contract is fulfilled. This step usually includes a formal sign-off, which documents that the contract has been successfully performed. Extraneous work and materials: This is work that s not included in the product purchase unless otherwise specified. In many cases, software vendors provide only the software of which their product consists. Usually, they specify that any hardware, cabling, air conditioning, infrastructure or other factors necessary for the successful implementation of their product are to be provided by the buyer. This works for both sides of the agreement because the vendor doesn t have to provide components that may not be compatible with the standard requirements, and the buyer can control the environment in which the application runs. This part of the contract should be specified, however, and the company providing the software should provide a list of recommended equipment that is compatible with its application. Creating the statement of work The statement of work (SOW) is a written document that details the scope of the work that the vendor will perform and is an output of the procurement planning process. The SOW can either be written by the buyer or by the seller.
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