In a previous post I posed the question “Can customised Mediation or the use of Dispute Review Boards resolve and reset IT Project contract disputes?“
I shared some of the findings and recommendations of industry focused research (conducted in collaboration with the New Zealand International Arbitration Centre) with senior international and domestic IT project stakeholders about the main causes of IT software development & implementation project misalignment and ensuing contract disputes.
A dominant finding was that IT project misalignment can often be traced back to the initial exchanges between a customer and supplier in requirements scoping. A customer may not adequately scope its needs (eg change scope or resources) and the supplier solution is then selected in this context. Despite commercial efforts and robust mutual contracting, a course may be set for IT project misalignment.
Conversations with senior industry stakeholders since we issued our research report have highlighted that the nature of software and its procurement, development, and implementation involves a degree of exploration. Attributing project outcome to customer behaviour only or supplier behaviour only is not always black and white.
So, is there an engagement path, that once misalignment and a contract dispute ensues, can diffuse conflict and reset a customer and supplier on course for a successful project outcome?
A path that is alternative to finding fault via cost intensive processes of litigation or arbitration that are likely lead to relationship and IT project termination.
We believe there is: IT project mediation.
With NZIAC I am designing an IT Mediation process to be part of IT Project Governance (as set out in a contracted IT project delivery statement of work or work order). It will centre on the use of a skilled, industry aware, neutral, credentialed mediator who is available from the commencement of an IT project.
Key elements are:
- The mediator can be deployed for contract disputes arising from specific IT project phases (e.g. requirements analysis or design or testing).
- It is a time-out (including as needed a short suspension of milestone compliance) to discuss with the mediator in confidence and without prejudice (ie whatever legal rights you have are preserved, such as termination right or damages claim) your understandings and commercial and or legal positions and to explore or explore commercial solution paths.
- Through a mediator’s process you may also decide, after talking with the mediator, to allow the mediator to share with the other party a view you hold that may promote a commercial solution.
- The process can be initiated at short notice and managed by the mediator in a short time frame.
- The estimated mediation costs can be shared as agreed in the IT project contract.
When busy stakeholders, with significant costs and revenue at risk, have explored commercially a resolution without success, this process offers them another way to solve the contract dispute. By achieving this we hope to improve the current modest success rates for IT projects as surveyed regularly and globally at scale by the Standish Group.
IT Mediation can be a cost-effective and time saving alternative to the fault finding processes of litigation or arbitration and assist in the successful progress of an IT project and the customer and supplier relationship.
I welcome your thoughts on this – please feel free to leave a comment or get in touch.
Finally wishing readers continuing good health in these challenging times.
About the Author
A New Zealand born lawyer, Gerard completed a Bachelor of Laws (1981-1985) and Masters of Laws (Honours) with a thesis in international trade law (1992-1994) at the University of Auckland. From 1994 to late 2016 he worked overseas gaining international experience.
From 2000 onwards, as a senior legal counsel and negotiator, he has focused on the development, provision and use of technology systems.
He has supported bespoke technology consulting, development & implementation and outsourced services engagements concerning material technology solution architectures and their delivery and service models. He also has extensive experience in negotiating and structuring alliance or channel engagements.
Gerard has worked for global IT consultancy groups and represented other global and SME providers, users, investors and early stage companies, and engaged with business and government agencies teams in the ANZ, Asia Pacific, North American, UK and European markets.