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Who pays?

By pr0teus ·
I certainly would appreciate some sage advice on a burning issue currently affecting my company.

I am a partner in a small IT firm that offers maintenance services to small- & mid-sized companies. In essence, if they don't have an internal IT dept, they can outsource to us and we take care of their needs in terms of hardware and software maintenance and supply.

In the case of one particular company with which we have a contractual arrangement, we had - at the initial interview - been asked if we could support hardware, and basic sofware, in addition to a specialised accounting package they utilise. Eventually, they decided that they would retain the services of a previous company for that specialised software and only have us support hardware and regular software packages (office, anti-virus installations et al).

Upon audit assessment of their systems and infrastrucure, we made recommendations for changes and upgrades, to, of course, improve efficiency and performance.

In the case of the server in particular, we recommended an upgrade from NT4 server to 2k3server. As many of you will know, this would not only require hardware changes, but upgrades (or reconfiguration) also in software titles currently run on NT which may not work with the new generation OS. The database for the Accounting pkg previously mentioned is run on the server.

We, therefore, made it abundantly clear that if we upgraded the OS, the accounting pkg could/would be affected and at best would require reconfig. at worst - a totally new installation. We consulted with the support individual for the Accounting pkg and asked if the current version would work on win2k3 server, he said "yes" (maybe in hindsight we should have asked if it would work if we did an upgrade in place, as was the case)

I must note that in consideration of the client's position, and in an effort to be helpful, we assured them that we would make every effort to have the accounting pkg working properly after we carried out the upgrade. We did the upgrade, and the software did not work (since we had been informed that it does work on 2k3 server, we opined that it would only need a reinstallation and reconfig.) Alas! we couldn't get it to work, after about 12 hours of attempting to do so.

The company then called in a support person for the accounting package, he rectified the situation, and sent them a bill. A bill which they expect us to pay!!!

Their case: the software changes (and thus the bill) was as a result of the changes we had made (which is true) so we should pay for the support services.

Our case: We made recommendations with a caveat that there may be problems with a particular s/ware, s/ware we were told (in writing) that we would not have to support. You accepted these recommendations, and by doing so accept the fact that you may have to pay extra to have sofware support for your specialised accounting pkg.

Who should pay?

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PAY THE BILL - keep the customer - Face it your outfit failed!

by SkipperUSN In reply to Who pays?

To keep the customer happy and future customers - Eat the Bill - it can't be that much.

First: Your recommendation stated that accounting package would have to be A or B, and your company would do that! - Well after 12 hours your company failed to perform within the contract. So they went and got someone that could do it..

PAY THE BILL - Your company didn't asked the correct questions - fail to perform to expected levels - you will lose big time in court - you will lose this customer at renewal time - you will lose future companies from word of mouth about this problem.. Cut your lose and PAY THE BILL...

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You're right, but...

by pr0teus In reply to PAY THE BILL - keep the c ...

You are right skip! We failed - it's a bitter pill to swallow but we did. Tanks for your words.

I have long concluded, however, that online forums are the last (or only) bastion of power and authoritative voice for some, and you strike me as exactly one of those. I'm a big boy - I can admit when I'm wrong and it doesn't need to be sugar coated, but get off your ego trip!!!!

We are here to help each other, and it doesn't have to be presented in an "I am right, you're wrong manner" Just present the facts and keep the attitude to yourself! You might learn a thing or two from Stress Junkie...

But at the end of the day you were right, and I intend on doing as you advised.

Thanks for the time you took to share your views

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Can't say I agree .....

by PMPsicle In reply to You're right, but...

First, recognize that this is a two part issue.
1. Customer retention
2. Who's right

Part 1 ... if the amount from the other guy is small and you'll save a client from it ... okay, make a marketing decision and eat it. BUT, be aware that that may colour your future dealings with that client ... and the 200 people he knows.

Part 2 ... and this is the part that I disagree with .... you told the client that the accounting software was out of scope, but that you would try to get it working. Now personally, that was a mistake. If it's out of scope, it's out of scope. You did not make a mistake by turning it over to the other guy ... you had said that that would happen. 12 hours qualifies as a more than acceptable attempt on your part. The mistake you made was in not just cutting it out. Out of scope is out of scope. That way the client has no question that they are going to pay extra.

Glen Ford, PMP
Can Da Software
IS Project Management
Business Process Improvement

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Why small companies are small .......

by relm In reply to PAY THE BILL - keep the c ...

I agree, pay the bill! This small business is already paying the bill in lost customer confidence. The work thye provided failed. They had apparently no back up plan, and have caused the client loss. Now they are whining over being responsible. That is sad.....and the reason they can anticipate less business as time goes on.


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You Made a Bad Call

by dsandlin In reply to Why small companies are s ...

Your company made a bad call when choosing to upgrade the operating system on a server running an application you knew very little about. At the very least you should have checked with the application vendor to ensure Win2K3 compatibility. You let your client down by just focusing on one component of a business critical application. Your company is responsible and should pay the bill.

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by mark.alexander In reply to You Made a Bad Call

As a systems/network consultant we MUST act as the coordinator to ensure the applications side is covered (at least pre-notification). It's the essence of what we do. Pay the bill, learn a lesson, and keep the client.

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Two issues: legal and customer relations

by stress junkie In reply to Who pays?

It seems to me that your situation has two sides: legal and CRM. On the legal side CONSULT AN ATTORNEY. Initial consultation is ( usually ) free.

The customer relations side is tied to the legal but, in order to have any room for discussion, let's say that the attorney says that you may not be legally liable for the accounting package fix. In this case the post from SkipperUSN is correct. You messed up. You created expectations of service performance that you couldn't produce. Also, even if the attorney says that you may not be liable for the accounting package bill your customer may still sue you. That will cost you money and your customer. Even if you prevail in court you will have out of pocket legal expenses, time spent in court, the case could drag out over years. Do you want the trouble that resisting payment could cost you?

This is one of the reasons that, when I'm working as a temp, I always use contract employment agencies. I don't want to be faced with contractual problems because I didn't think of this or that. Nor do I want to face dealing with a customer that doesn't pay his bills. True self employment or running a service business has its pitfalls. You are responsible for everything, even if you misspoke or just didn't think of some given issue.

In the end my advice is the same as provided by SkipperUSN. Pay the bill and try to recover your customer's good will. And learn a lesson.

I think if I were in the same starting situation that you describe, before any work had been done I would have done this.

I would note that performance increases may be achieved by doing some work. I would mention that to the customer, and then drop it. If the customer is satisfied with their current systems then, as they say, if it works don't fix it.

If the customer showed any interest I would put together a formal proposal. This would include the fact that the people supporting the accounting system may be required to perform some work and that I could not make that determination. This would be listed as a project 'issue'.

If the customer wanted to proceed I would ask the customer to set up some sort of communication between myself and the accounting application support people. Their involvement would be required and they would assume responsibility for making the accounting package work.

A backout plan would be formalised so that if the accounting package, or any other software, did not work in the new environment, then the entire project would be rolled back to establish the original system environment. The customer would still have to pay for any purchases and for time spent my me on the project.

The customer would have to agree to take final responsibility for whatever happened during the course of this project. An attorney would say that your customer would indemnify you of liability.

As I mentioned before, when I'm working as a temp then all of this stuff can be done verbally because my employer, the contract agency, assumes liability for my work. This is in my contracts. But since you are working for a service business that actually does the work then this business is liable.

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Thank you

by pr0teus In reply to Two issues: legal and cus ...

You're time and effort were much appreciated (as was that of SkipperUSN).

We live, we learn and we cut our losses.

I truly also appreciate your thoughts on what may have been a more correct procedure.

Keep on helping...

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Contract Terms - Relationship ?

by Dilbert-Tom In reply to Two issues: legal and cus ...

My first reaction was : "Pay it and raise your rates to cover this BS and anything like it in the future.", or just state that you can't be liable for 'unsupported (by you) Third Party Software', perhaps paying that bill (once) while making it clear that this is outside of the scope of your services.

If this is a key customer, you are going to need to be a lot more formal in terms of specifying service provided and associated liability (going forward).

What my gut says (and I trust my gut more than I trust Lawyers anyway, although it might initially seem more expensive to do so, in a longer analysis it might be cheapest) is to eat the bill and either carefully, explicitly define your responsibilities and liabilities (disclaim liability for anything that you are not explicitly stating that you support - to make it very, very clear that future issues are not going to be billed to you - and that if your work has some demonstrated defect, that YOU would be given the opportunity to either fix it yourself - or engage any needed other services yourself) or raise support charges to cover this kind of 'Third Party Billing' even if it means that you service becomes substantially more expensive for this client. Anyone else they expect to be able to deal with as they are treating you will also need to cover those liabilities - the non-confrontational way to deal with it is to raise rates accordingly (so as to make the client pay the bill 'less directly', avoiding confrontation about the specific bill, but escalating the issue of liability (I assume that what you did was done properly, sounds like Microsoft may have caused the problem with the Third Party Software - perhaps the client should have billed them [but wouldn't even try it because Microsoft does have a substantial legal department, and also would consider this client to be a lot less significant than you might].

Longer term, it appears that this client is being unfair and somewhat nasty. I personally would look to whatever the end to your contract is currently, and be 'unable to support that specific client' in the future (stated clearly: "Dump them, they don't seem worth it."). Naturally, a lot depends on how significant this client is to your businesss - if they are a major client, a great deal of added formality may be needed to include having Lawyers prepare appropiate disclaimers to assure that you will not assume such liability in the future.

The client seems to be somewhat abusive and heavy-handed... the kind of client I'd love to refer to my competition (to let them deal with the BS). Any client with an attitude like that is unlikely to be treating THEIR customers well enough to prosper - in any case I'd seriously consider pursuing other, more reasonable, clients rather than invest a lot of energy in an adversarial client.

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due diligence

by service junkie In reply to Two issues: legal and cus ...

I agree with most of hstress junkie's position. Where I differ the project plan should have included a "dependence" calling for the installation of an eval platform running a copy of the clients accounting package.

In any case, all third party software must be validated as compatible by the vendor or by lab testing prior to proceeding with an upgrade.

The concept that IT Service providers should keep in mind is "Due Diligence. Simply relying upon a contractual "disclaimer" fails to meet the reasonable expectation of due diligence.

In business, the unexpected disappointments are less important than how they are responded to. Here, your company has an opportunity to take leadership and proactive resolve this situation on your client's behalf.

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