At the same time, the shift from bespoke applications (purpose-built to meet a company’s own business processes and requirements) to accepting mass market solutions has put more pressure on solution due diligence. Said differently, the onus is now on the purchaser of cloud services to confirm not only that the solution they are buying meets their requirements, but also that the documentation of that solution, as referenced in the contract, matches what has been sold and promised. While the former often occurs on the surface level during the sales process, the latter occurs less often because the amount of time available to do that due diligence is being compressed due to the timing imperative.
The result is that, in many deals, this due diligence is not occurring, or does not occur until after the customer has signed a contract for a non-cancellable, non-refundable multi-year financial commitment with very limited exit rights — and absolutely no exit right for fit-gap issues that should have been identified in pre-contracting due diligence and solution validation. I should point out here that, in some deals, this is a “known known” inasmuch as the client fully acknowledges that solution due diligence will not be done until after subscription signing. Those clients are taking a calculated risk and making a bet that what is good enough for the mass market will be good enough for their company and that their business processes can be realigned with the capabilities of the mass market solution. Those deals are not the subject of this article.
With regard to the remainder, any good sourcing and legal team early on in the deal process will ask the business and technical leads if they have validated the documentation for the services to confirm that it aligns with expectations for performance, capabilities, etc. Often, the answer is a somewhat sheepish yes. If there is not an implementation partner or independent consultant engaged to assist with that process, we can be fairly certain that solution validation is only occurring on a limited basis, if at all. Why?
