BUSINESSES can avoid pitfalls in the purchase and supply of information technology through careful contract planning. ‘You need your IT to grow with you and you need to maintain flexibility, otherwise it can be too costly or impossible to react,’ said Iain Tolmie, a respected IT specialist and chartered information-technology professional.

The visiting lecturer added that the ever-increasing costs and complexities of IT meant that the work frequently had to be outsourced to specialised firms.

‘That’s when the loss of control happens,’ said Mr Tolmie.

‘You enter into a contract to provide services but something changes in your business, meaning you need to change the computer service you have. Maybe your business has expanded or there’s a new opportunity. Because the computer is so important, you suddenly have to change the systems.’

This is where problems arise. Business opportunities can be lost due to the expense of changing a system or the time lost due to the complexities in dealing with an external IT supplier.

‘It’s between time and expense.’

These problems affect all types of companies as well as public bodies.

‘It’s surprising, but a truism that most companies – large or small – are dependent on computers these days. This kind of thing will affect almost any size of company. While a large company might survive a mistake, a little company could very easily go out of business.’

The solution lies less in fixing problems as they arise but more in planning for a contract that can react to change.

‘That means that you have to think ahead and negotiate with your supplier so you can do that.

‘The other thing you have to do is assume that it will all go wrong – not that it will, but you need to have arrangements built into the contract to manage the disputes that arise so that it doesn’t turn into a disaster.’

For the last 14 of his 40-year career Mr Tolmie has acted as a dispute resolver, managing high-profile, multi-million pound projects.

‘Computer contracts are like aircraft. You only hear about the ones that crash,’ he told local firms at a lecture hosted by the Guernsey Training Agency.

Outsourced computer contracts are invariably bound by intellectual property laws. Smaller, more-vulnerable businesses need to ensure they have the appropriate licensing rights.

‘The important thing is risk management – that means making sure that you retain the necessary right to retain the software that’s made for you.’

More information can be found by looking at www.resolveit.co.uk or contacting Mr Tolmie at it@resolveit.co.uk