Open vs. capped implementation
Vendor gives a quote for the entire project implementation. However, it’s a challenge as the detailed requirements come in at later stage, when one goes through business requirement phase. This leaves a possibility of cost escalation at later stage. One way to manage this is to conduct a more detailed ‘paid’ analysis, which should allow vendor to give a high-confidence estimate to which it can be tied-to. Typical arrangement for this paid analysis is that if it does not work-out vendor gets paid for it, and if it does, it gets absorbed in the overall project cost.
Price sensitivity to changes in project scope
One needs to conduct an analysis on sensitivity of TCO to changes in project scope OR expected scale of operations. For Example, will you need to invest into a new server OR an additional license suite, if the volume OR users increase by 10%? You also have to look at incremental per unit additional development cost to be charged by the vendor due to enhancement in project scope.
Existing infrastructure buy-back by Vendor.
Though it generally does not happen, one can look at the opportunity of Vendor to buy-back the infrastructure, which may go obsolete due to need for a new hardware and software platform.
PLEASE REFER COMMERCIAL EVALUATION MATRIX Execution-MiHPractice Tool to enable an effective COMMERCIAL & CONTRACTUAL Evaluation for a tool/solution provider.
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