• Technology
  • August 05, 2021

Business Software and IT Agreements, how do they work?

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By Lawbite Team

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As a business owner, you may want to enlist the help of IT providers and software developers to design technology and software programs for your business. These may be used to sell your own applications or technology that helps your business operate. 

This article will outline the basics of software and IT agreements and the role they have in your business, as well as the services LawBite offers for business legal advice for software and IT agreements.

What to consider in business software and IT agreements

Technology has an important role to play in business. IT and Software agreements assist with this, whether it be in the acquisition or in the creation of software you want to sell on. IT agreements regarding software come in a range of different forms, usually covering how software is developed, tested and supported (software license agreements).

Businesses can get many benefits out of using business software and adopting appropriate  IT agreements, such as increasing productivity, creating faster customer engagements and driving value from your initial investment.

There are many types of business software, and determining which kind is ideally suited to your business depends on how big your company is and what kind of service it provides, as well as the tasks that you’ll need the software to undertake. Some types of business software include; database or accounts software, warehouse and logistics programs, payroll software and asset management solutions.

If you are looking for the right software for your business, this can improve many aspects of your business such as developing the efficiency of staff, measuring productivity levels within the office, streamlining business accounts and making communication between your business and its suppliers and customers much more efficient. Using software can also aid business growth as it encourages you to develop a long-term strategy that takes into account customers, employees and the service you provide. 

You may also need to upgrade your software if it’s running slow, isn’t able to cope with the number of users or you have to change needs as the business grows and the software is out of date. 

Software license agreements set out the rights of each party, costs and other aspects of the agreement, such as support levels and the ability to resell. If you are developing business software or buying it in, make sure you take legal advice. Without doubt, the other side is!  

When purchasing software for your business you need to decide whether you want bespoke software which is designed specifically for your business or packaged software that is standardised. Bespoke software is tailored to your business and is specified for whatever functions you need. However, it can be more expensive and time-consuming.  Off-the-shelf or packaged software is not designed for exactly what you need, but could be a lower-cost option and advice and support is based on feedback from many users.

IT agreements refer to agreements between a provider and a customer under which a service is provided relating to IT systems. In the contract, the provider agrees to deliver a service and support to the customer, detailing all aspects of the service including cost, duration supported software (operating systems, databases and office applications, etc.), and hardware (desktops, printers, scanners, etc.) are usually covered by the agreement. 

An IT agreement may also cover service levels, an outline of when the work will be done and the fees as well as response times (how long the provider takes to respond to the business owner’s request) and resolution times (how long the provider takes to resolve the issue). You can learn more about IT service level agreements in our FAQ section below. 


FAQs

LawBite has put together a FAQs section on the most common topics which arise when talking about business software and IT agreements. 

  • What are software license agreements?

Software license agreements are those between the software company and the customer which detail general information about when the agreement will take effect and how customers can use the software. It also outlines the parties involved which are entering into the agreement. Software license agreements list the terms of the agreement such as the fees involved and any information about maintenance of the software. There’s also a section for any information not covered in the other sections like specific details about the agreement between the parties.

  • Why do I need a software license agreement?

A software license agreement is important when purchasing business software as it actually grants businesses the right to use the software subject to terms of the agreement. It also ensures both parties are clear on the terms of the purchase/sale of the business software, determines who is liable for any future issues that may arise and details of any liability caps, as well as support and maintenance of the software. This may include any software updates, errors and general technical support. 

  • What is an IT service level agreement?

A service level agreement (SLA) is a document between a service provider and customer which identifies the service. An SLA is signed before purchasing any IT service as it includes an overview of the agreement and the standards of service the software provider will meet. SLAs establish the terms between provider and customer and specify the service provided as well as the metrics that measure the performance of the service.

  • How can software help my business?

Software has many benefits to businesses when implemented. These include measuring office productivity levels and improving the efficiency of your employees. It will also allow you to manage customer relationships through a more effective communication with customers, thus improving sales


You can get legal assistance from LawBite 

LawBite’s mission is to democratise how SMEs get the expert law they need - easier to access, clearer to understand and much more affordable. We connect you with the best lawyers to give you top-class legal advice.

No doubt there will be many times when you wish to use software providers to help your business, whether they are writing or designing software programs, selling you existing programs or applications, or maintaining any of these for you.

Our experts can help you work through issues arising in this area, such as; the negotiation of commercial terms, delivery specifications, service level agreements and ownership of intellectual property.

Need a contract checking over, or get a new one set-up,  view our business document templates or click below to get started:
 
Book a no commit 15-minute call with our friendly lawyers today or learn more by joining LawBite for free. 

We hope this blog post has been helpful in detailing what to consider when purchasing business software and signing IT agreements by outlining how software can help your business and why you need a software license agreement. 

You can also read more about LawBite in our about us section, check out our FAQs or make an enquiry with us. 


In closing

Nothing in this article constitutes legal advice on which you should rely. The article is provided for general information purposes only. Professional legal advice should always be sought before taking any action relating to or relying on the content of this article. Our Platform Terms of Use apply to this article.



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