Long-term contract

by John Long, CEO of Avionte Staffing Software

Hopefully my previous post has made you think twice about how you approach the process of signing a contract with your software provider.

If you sign a two-year contract with your software provider, what incentives do they have to keep you happy? Does it really matter if they provide great support or continue to develop new features and enhancements? How much influence will you have when it comes to the things you need to improve your business?

Here’s a scenario to get you thinking about what could happen to you if you sign a long-term contract:

A very large client requires you to accept a feed from their current time system. If you can’t provide it, they will be forced to move their business to one of your competitors. This is a $10MM account for you! You reach out to your software vendor who responds with one of the following:  a) We could do it, but we need to charge you $500,000 to develop it, b) We can do it, but it will be in the next version out in 2014 or c) No, we can’t do it. You have seen and know that many software packages already offer this feed. You’ll want to change software, but alas, you’ll be in a two-year contract.

The strongest staffing software firms don’t require long-term contracts.

Your software purchase should be on a month-to-month basis. Paying by the month ensures that you never lose control over the direction of your company. And it forces your software vendor to always keep your best interests at heart.

Don’t put your business decisions in the hands of your staffing software provider. If a vendor really wants your business, I guarantee they will drop the long-term requirement. If they won’t, what does that tell you?

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