Complexity in sourcing transactions relates to the interdependence between the parties executing a program. However, “complexity” can be a surprisingly nuanced concept whose meaning can vary under different circumstances. Here are a couple of these nuances.

What Is Complexity?

If you are buying a physical product, the transaction is not truly “complex” if it can be described completely in the contract, although the product itself may be complicated. For example, a rocket ship is a complicated product, but with specifications that can (and probably should) be described in perfect detail, there is no requirement for an overly complicated contract structure, and the relationship between the parties may not be complex. Contrast this with an engagement that involves business process redesign accompanied by software development and implementation like an enterprise resource planning (ERP) implementation, or a large-scale robotic process automation (RPA) initiative. Although the contract can specify the desired result, in many cases the results will depend on both parties working together to realize that result. This interdependency makes the relationship complex and requires a more nuanced procurement and contracting process.

As 2018 comes to a close, we have once again compiled all the links to our Contract Corner blog posts, a regular feature of Tech & Sourcing @ Morgan Lewis. In these posts, members of our global technology, outsourcing, and commercial transactions practice highlight particular contract provisions, review the issues, and propose negotiating and drafting tips. If you don’t see a topic you are interested in below, please let us know, and we may feature it in a future Contract Corner.

There is an adage that basically says that businesses don’t do business—people do business. That might seem obvious, but it’s useful when one stops and thinks about the interplay between a contract, how that contract is negotiated, and whether the relationship between the people who will be doing business can survive the negotiations.

This plays into the deal work that many of us do because many of those deals are complex—and the parties will ultimately rely on each other to drive success. For example, to implement transformational software, like an ERP system, the systems integrator must bring a unique set of skills to the table. The contract can drive the vendor to bring those skills and they must be proficient, but for the project to be successful, the customer must also bring certain skills: knowledge of its business processes, the ability to assess and implement change, and more. In other words, for the project to work, the parties have to act as partners.