The ERP Contract Negotiation Process – How Long Does It Really Take?

While the ERP contract negotiation process is dependent on the facts of the particular transaction, all negotiations have a similar process and a similar trajectory. The cost of the software and implementation, the importance of the software being licensed, the number of vendors, and the risk presented by the technology will all impact the length and difficulty of the contract negotiation process.

1. Dollar Amount of the Deal. Smaller sized deals usually demand less of an investment in attorney time and attorney review than larger sized deals. There is also the issue of risk; smaller deals usually (though not always) present less risk to the company in terms of implementation failure. For the most part, it is fair to say that a $5 million deal will usually require more review than a $5,000 deal. The economics also need to make sense. It typically does not make sense to spend $40,000 in legal fees to substantively review and negotiate a $5,000 deal.