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The Contract Certainty Blog

Are Governance Standards the Solution to IT Contract Blowouts?

November 15, 2006 Jamie Wodetzki Risk and Compliance  

An attention-grabbing article in The Australian IT starts with a couple of IT contracting horror stories, but quickly drifts off on a rather dull voyage through the alphabet soup of IT governance standards. Never mind that your contract might be full of holes. What you really need is AS-8000. And AS-8015. And AS-8016. Or AS-8018. Or BS-15000. Or maybe ISO-20000. And ISO-27001, of course.

Whatever the solution, the horror stories are classic tales of deals gone wrong:

In the first case, a sales guy won himself a big fat bonus and a nice tropical holiday by underbidding to land a mission-critical government project. Surprise, surprise, the project failed, the vendor lost $14M, and the government won a $5M damages claim to cover the costs of their manual work-around.

In the second case, a technology deal was done over a few beers in a London pub. It was supposed to cost $2M. It ended up costing over $12M. The manager responsible was fired for secretly milking funds from various accounts to bankroll his project.

Will ISO-20000 save you from these horror stories? Who knows? But a tightly drafted contract with a clear statement of work would be a good start.


Jamie Wodetzki is Exari’s Co-founder and Chief Product Officer.