The Case for Centralized IT Contract Management: A Four Force Model

Abstract

n this chapter a model is developed that describes four forces that move organizations toward centralized IT contract management. Specifically, the model illustrates how centralizing IT contract management enhances organizational performance in four areas. First, centralizing IT contract management allows for a corporate level view of technology, which supports not only interoperability, but also optimizes software license inventory. Second, it combats vendor opportunism by creating a set of contract negotiators who have as much knowledge as the vendor’s contract negotiators. Third, it enhances information retrieval, but locates the physical contracts in a central location, which allows the legal department, project managers, and senior managers to quickly and reliably locate contract details. Fourth, it provides the proper motivation to project managers and contract negotiators by rewarding each job separately rather than by lumping the rewards for timely project completion together with the rewards for efficient contract negotiation.