Unless you have been living under a rock over the last few weeks, you’ll know that we have just launched our Commercial Matters Podcast.
Don’t worry if you weren’t aware of our new podcast – this blog post will bring you up to speed!
The purpose of this podcast series is to help you sharpen your commercial mindset when you work in IT programmes.
If you are a Programme Director, Programme Manager or a Project Manager supporting complex digital transformation or IT programmes, this podcast is perfect for you.
Our first theme is IT disputes – and in this blog post we will summarise the key points from our inaugural podcast episode IT Disputes – What Makes Them Different?
What Are IT Disputes?
First things first, what is an IT dispute?
These are disputes that happen between an organisation that wants to implement an IT programme and (possibly) it’s suppliers who are helping deliver that IT transformation programme.
Moreover, the programmes themselves can cost between £10 million and £50 million, and last anywhere between 1-4 years. This is a substantial exercise, and as a result, no wonder that disputes arise.
We have dispute resolution expertise and it is a service we offer as part of our Managed Commercial Services offering.
IT Disputes – What Makes Them Different?
In episode 1 of our series on IT disputes, we explored what makes such disputes complex, costly to resolve, and so common.
In this episode, we also looked at learnings we can take from disputes to avoid them happening in the first place. Here are the three key points from the podcast.
1) The competing versions of events
In an IT dispute it is very common to have a competing version of events. But what does this mean?
Typically, when things go wrong in a programme you might have a view that the supplier has caused the problems. You can probably give a month by month account of how the supplier was responsible for the failure of the programme.
However, when we say there is a competing version of events, we mean that the supplier also has its own narrative as to what went wrong. The protagonist in this narrative is yourself and not them, and they can very clearly describe your failings.
The real problem is that both versions of events will be equally credible and equally persuasive to someone who has had no involvement in the programme.
In short, if you want to get to the bottom of who caused a fault or a liability in an IT dispute it is virtually impossible to determine it without a trial.
2) IT disputes tend to have a high gestational period
Both parties usually know well in advance that a dispute might erupt. However, although both parties may have spent enough time trying to rescue the programme from those difficulties, they may eventually fail to do so.
Efforts for dispute resolution often don’t materialise, because when both parties step in to recover a situation it muddies the water in legal terms.
Each party would go as far back in history as possible to find a shred of evidence that allows it to get an upper hand over the other party in the dispute. However, with so much evidence provided by both parties, it inevitably leads to very long trials and huge costs.
For example, there was a recent case between IBM and CIS General Insurance. This case involved a £50 million programme and the events that were in the dispute were spread over 2 years.
That trial was in a claim for a staggering 32 days. Consequently, the legal costs are likely to be in the region of several hundreds of thousands of pounds for each party.
Check out our post: Why do Commercial Disputes end up in Courts or Arbitration? For the 6 key reasons why disputes go unresolved.
3) Parties in an IT dispute are co-dependent
In an IT programme, both parties are highly dependent on each other. As a result, it makes the determination of a root cause extremely difficult.
Even when a root cause can be established by a judge on the balance of probability, the judge still has an action to attribute the loss being claimed by either party to each action.
The judge may ask: Would that loss have incurred if the other side hadn’t caused a loss or hadn’t caused a particular action? This is a very difficult legal question to overcome.
Furthermore, in a case where both parties are to blame for the state of affairs, it is unfair on a judge. This is because you’re asking the judge to pick one of you who was right in law.
A judgement would often declare a single winner but it can be a small victory. For example, you might win a case, but you might get 10% of what you were claiming for. That is what we often see in an IT dispute that goes all the way to a judgement.
What should You Take Away From This?
The key thing to bear in mind is that IT disputes are an extremely expensive affair. Therefore, if you can find a way to avoid getting into an IT dispute you should take that on.
However, if you are preserving your rights and not muddying the waters in legal terms you will stand in a good position if things eventually did have to go to court.
What’s To Come?
S1 E2: March 15th – In Episode 2, we will explore the common version of events that tend to be argued by a buyer and a supplier locked in an IT dispute.
S1 E3: March 22nd – We will then focus on the considerations around when to crystallise a dispute, and why it is more of an art than an exact science.
S1 E4: March 29th – Next, we will explore the recoverable damages that can be awarded to a party that wins in a court.
S1 E5: April 6th – Finally, we talk about the different disputes specialists who can assist you in your dispute.
Where Do You Go From Here?
This blog post summarises the key points from our inaugural podcast episode: IT Disputes – What Makes Them Different?
The Commercial Matters podcast is hosted by Amit Kapoor, who is a commercial consultant on major transformation programmes.