Director of a Technological Company? You Can Increase Annual Revenue by 15% with Some Simple Modifications to the Service Contract.
In the initial stages of planning a new technological project, you must take into account all the malfunctions and errors that could happen, who the client is, what are the client’s demands, and how many hours of development, implementation and support will it take to complete the project.
When issuing a tender, price estimations about such projects may not be precise, and this can affect your ability to win the tender or to achieve profitability.
As a result, a contract that looks attractive on the surface can ultimately be very damaging for a company.
Of course, you want to price the tender in such a way that ensures you some profitability, formulating your license agreement and your Service Level Agreement (SLA) in such a way as to reflect different levels of service and to protect reasonable profitably.
When I served as the legal consultant of a global high-tech company, I introduced a business-oriented approach that helped the company to sell the license with basic service support only, in contrast to its conventional agreements in the past.
I also improved the Service Level Agreement (SLA) of the company in order for it to include several levels of service.
The outcome was selling advanced support services to the client, and that produced extended annual revenues 15% beyond expectations from those of the license fee.