Short versus long term contracts - Pros and Cons

[Ditto]

I kicked this thread off from the SIMS up for sale one to discuss the pros and cons of short versus long term MIS contracts.

 

To start, one pro I had was significant per pupil cost reduction when I got quotes for 5 year contract. I guess one con was when we got a new head, he desperately wanted to move to Sims but the long term contract made that much trickier. Actually, for me that was a pro!

[caffrey]

I'd much prefer 1 year contracts, rolling if possible - being stuck with a service you don't like or deteriorates over the years is the worst

[Ditto]

Rolling contracts do appeal, but longer term can bring big discounts - I'm talking double digit percentages. What I'd really like is long term with very strict SLAs that allow penalty free escape. The issue I see with so many SLAs, especially internal company ones, is that there is no consequence to not meeting them.

[FN-GM]

It depends on the product.

 

If it’s a 3 year contact on an internet connection, with a good company and a good SLA it would be low risk. The internet isn’t going anywhere!

 

However, the same length on a legacy, on premise software application wouldn’t be.

 

I have seen many places sign 3 year contracts for copiers. By year 4 they are worn out and very unreliable.

Edited November 29, 2020 by FN-GM

[Edu-IT]

It depends on the product.

 

If it’s a 3 year contact on an internet connection, with a good company and a good SLA it would be low risk. The internet isn’t going anywhere!

 

However, the same length on a legacy, on premise software application wouldn’t be.

 

I have seen many places sign 3 year contracts for copiers. By year 4 they are worn out and very unreliable.

Copiers is an interesting one. If they are maintained as part of the agreement then they should be as good in year 3 as year 1.

[FN-GM]

Copiers is an interesting one. If they are maintained as part of the agreement then they should be as good in year 3 as year 1.

 

I meant to say 5 year contracts.

 

Even though they are serviced they are still less reliable than they were from new.

[enjay]

For me, it is case-by-case. How much (actual money, not percentage) is the discount? How likely am I to still want that product after 3 or 5 years? The latter is based on all sorts of things - cost of changing again, reputation of the company/product, what role it fills/service it provides to the school, etc.

 

I often go 1 year initially then renew for multi-year after that. I have previously negotiated a 5-year deal price with a 1-year get out clause, also from another company a 1-year agreement with a pre-agreed price for multi-year renewal after 12 months.

 

For an MIS or finance system, I'd be more inclined to go multi-year as I can't see myself changing MIS as often as I might change room booking system, plus we'd have done more due diligence on a MIS change than some other edtech products.