Choosing the right association management system (AMS) vendor is paramount when it comes to association management.
Associations have a plethora of options to navigate when choosing the right AMS, but they often overlook the crucial contract negotiation phase.
Handling the intricacies of these contract agreements isn’t exactly exciting, but it’s always a good idea to make sure your organization is set for success. You’ll build a solid foundation for a fruitful partnership.
Let’s explore what contract considerations are in the first place and the top ones to keep in mind.
[Related: Why Outsourcing Might Be a Good Idea for Your Organization]
Understanding Contract Considerations
Before engaging in contract negotiations with an AMS vendor, you must grasp the concept of contract considerations. So, what are they?
Contract considerations entail various (and often complex) factors and terms that both parties must take into account. These factors range from the scope of services to pricing structures, from data security measures to termination clauses.
Contract considerations serve to fulfill these main purposes:
- Clarify expectations
- Allocate responsibilities
- Mitigate risks for both the association and the AMS vendor
This sets a path for a stable and mutually beneficial partnership.
[Related: Data Governance 101: The Basics of Creating Your Association’s Data Policies and Procedures]
Importance of Contract Considerations
Contract considerations hold immense significance in making sure your association and your vendor get along. The importance of these factors is found in four key areas.
Clarity and Alignment
Contract considerations provide clarity and alignment between your association and your AMS vendor. This is especially applicable regarding the scope of services you’re paying for and the expectations that come with this partnership.
Defining these aspects clearly up front ensures both parties are not only on the same page but also working toward common goals.
Risk Mitigation
Comprehensive contract considerations mitigate risks like these that accompany an AMS implementation:
- Data security
- Service levels
- Termination procedures
Minimizing the odds of such unexpected challenges increases the likelihood of a successful partnership.
Legal Protection
Unsurprisingly, contracts are legally binding agreements.
They outline both parties’ defined, enforceable rights and obligations. This is typically a huge relief for your organization and AMS vendor because if a contract dispute or breach occurs, legal protections are firmly in place.
Financial Transparency
Pricing and payment terms are critical aspects of contract considerations for a couple reasons.
For one, you’ll respect the financial transparency that your vendor provides. The clearer (and fairer) their pricing structures and payment terms are, the better.
You should want to have a level of trust between your association and your AMS vendor. Meanwhile, you’ll also avoid potential cost-related misunderstandings and disagreements.
[Related: 9 Tips and Tools for Successful Project Management at Associations]
Top 11 Contract Considerations With Your AMS Vendor
Let’s explore the top 11 considerations to keep in mind when crafting any contract with your AMS vendor.
1. Scope of Services
Distinctly delineate the scope of services your AMS vendor provides.
What do you want from them, and what can they give you? This isn’t solely about the software. It’s also about how the vendor implements, trains and supports any additional services pertaining to the software.
[Related: How to Collect Helpful Member Feedback]
2. Term and Renewal
Define the contract terms just as clearly as the renewal terms.
These might include pricing or term changes upon renewal. Understanding these aspects (and having them set in stone) prevents unexpected disruptions and financial implications.
3. Pricing and Payment Terms
Again, transparency in pricing is key.
Ensure the contract frankly communicates all costs, such as up-front fees, subscription costs and additional charges! No one likes to be caught off guard when it comes to finances.
[Related: Why Your Organization Needs a Learning Management System]
4. Service-Level Agreements (SLAs)
Establish clear service-level expectations, such as uptime guarantees and support request response times.
These SLAs are mainly to uphold accountability, but they also ensure your vendor resolves issues in a timely manner. Who wants to work with an AMS vendor with no sense of urgency if data security goes awry?
5. Data Ownership and Security
Clarify who owns any and all data within the AMS and the measures in place to protect this valuable information!
Data security and privacy are paramount, especially considering the sensitive nature of association data. Remember that your data includes highly personal records like these:
- Invoices
- Contact information
- Bank account information
- Client notes
- Employee records
[Related: 9 Tips for Technology-Focused Project Management Within Associations]
6. Termination and Exit Strategy
While no one hopes for (let alone anticipates) the end of a partnership, you still must have an exit strategy in place.
Agree to clear terms for contract termination, which might include data migration procedures or support during the transition period.
7. Intellectual Property Rights
Define ownership of any customizations or integrations you develop during the contract term.
This is vital: Even if an idea doesn’t come to fruition, you still need to know and clarify what’s legally yours.
Bottomline, know your intellectual property rights.
[Related: How to Encourage Innovation in Your Association]
8. Compliance and Regulations
Ensure the AMS vendor complies with relevant regulations, such as GDPR and/or industry-specific standards.
Understanding regulatory responsibilities is crucial when protecting your overall reputation and integrity. Taking these steps also protects your organization from facing a range of potentially severe fines and penalties.
9. Updates and Maintenance
Closely examine software update and maintenance procedures, such as the following:
- Cleansing and deduplication
- Downtime requirements
- Communication protocols
- Regular updates
All of these (and more) are necessary to keep your AMS functioning smoothly without losing precious time, effort and money.
10. Dispute Resolution
Make sure there’s a process for resolving disputes between your association and the AMS vendor.
Having a forthright dispute resolution mechanism minimizes both internal and external friction. It also gives you some relief, knowing you can address conflicts promptly and fairly if/when they arise.
11. Training and Support
Ensure your contract includes provisions for comprehensive training and ongoing support from the AMS vendor. This is essential for association staff to effectively use the AMS and leverage its capabilities.
Training and support might cover an array of tasks and areas:
- Initial training sessions for administrators and end users
- Classes on how to access user manuals, online tutorials and other educational resources
- Established help desk services
- Troubleshooting assistance
- Software updates
- Support mechanisms for user adoption
- How to maximize system efficiency
All these support areas boost your organization’s overall satisfaction with an AMS.
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Contact Dennison & Associates To Find the Right AMS Vendor
Carefully considering your contracts means you want to protect it just as much as you want to see it thrive!
Still, this process might be a lot for you to take on when you’re busy providing services to members. That’s where Dennison & Associates comes in.
At D&A, we value our clients like you value your members. We’ll help you find the AMS vendor best suited to your business and negotiate comprehensive contracts that protect you.
Are you ready to start laying the groundwork for contracts with your vendors? Get started today, and contact us for a consultation!
Featured image via Pixabay
