Karen Fedele uses the term "quarterback" to describe purchasing's role in the software buy. She says, purchasing "coordinates all the different players involved in the process to secure, implement and manage the contract." Other players may include representatives of IT (information technology), end user groups, and the legal and finance departments.

Purchasing takes on such a leadership position because of its expertise at negotiation and contract management, says Fedele, who is a commodity manager in the global procurement organization at The Gillette Co., Boston.

"Purchasing takes a holistic approach to contract management and focuses on the synergies working in a true team scenario," she explains. "The company comes away with a much better contract, one that can't be achieved by an individual. Purchasing has expertise, understands needs of various parties and is expert at negotiation and acquisition. That's our charter."

In addition to not having to worry about an audit, (independent third-parties like the Business Software Association regularly conduct audits to ensure companies are in compliance with their software license agreements), benefits of purchasing involvement in the software buy include cost savings resulting from successful negotiation. For instance, many people wouldn't think of including a cap on software maintenance fees in a contract. Purchasing will look at that and anything that represents a cost. "We will try to negotiate it to our advantage," says Fedele, who was on hand at the annual meeting of Caucus—the association of technology procurement professionals in New Orleans to share some of her experience at purchasing software. During her session on negotiating and managing software license agreements, she identified three best practices:

• Purchasing professionals involved in the software buy have an understanding of terminology and components of the agreement.
  A software license is a "right to use" intellectual property. Software buyers following best practices know the type of software they are purchasing and are familiar with various kinds of license agreements. Terminology used by software publishers in a license agreement may vary from contract to contract. Although slight, variances in definitions found in software licensing agreements can make a material difference in how a company is going to use the license. Fedele suggests buyers dissect the terms.
  "It's important to read the agreement and understand what the terms mean to that specific publisher, she says. "For instance, you can't assume that you are going to have the right to install the software on as many systems as you want unless the terminology specifically states this." Savvy software buyers also track current events that may have legal implications for their companies such as UCITA (Uniform Computer Information Transactions Act, a law which provides rules for software license agreements and other computer transactions similar to the Uniform Commercial Code). Trade journals and associations such as Caucus (www.caucusnet.com) are good sources of information.
  It's also not a bad idea for purchasing to work with IT to "lock down" the company's operating environment so that users can't download software from the Internet or install software on their own. Running a standard desktop suite of applications qualified by IT also helps streamline help-desk efficiencies, prevent users from inadvertently agreeing to licensing terms and conditions that don't favor the company and avoid issues that could arise during a software audit.
• Purchasing pros who buy software use tools to develop a standard contracting process.
  From her experience, Fedele recommends buyers use a standard approach for the contracting process, which helps reduce the time it takes to go through the contracting process. Buyers may also want to consider drafting standard contract language with the help of the legal department.
  "We all know that boilerplate manufacturer's agreements are not to the customer's advantage," she says. "They are written to benefit the party that holds the copyright."
  Prior to the negotiating process, software buyers using this best practice develop a "most desired", "happy medium" and "least desired" list of requirements, and identify certain elements of the agreement ( i.e., contracting parties, maintenance caps, acceptance testing).
  During the negotiation process, a critical piece is developing a strategy. Savvy buyers know what they want and what's possible. They also develop an "alternative to the negotiated agreement."
  Checklists help to manage contracts, says Fedele and should help buyers to develop responses to such questions as: Did we get all the language that we need in our terms and conditions? Has the software provider supplied all the exhibits referenced in the agreement? Are there supplemental terms and conditions that come into play? Are there any other types of provisions that are referenced? "If it is referenced in the agreement, the software publisher must provide it," she says. "If not, you don't have a complete contract and you definitely can't negotiate an incomplete contract."
• Software buyers ensure compliance to agreements.
  Most importantly, software buyers adhering to best practices purchase only legitimate software and install and use it in accordance to terms and conditions agreed to within the contract.
  They develop relationships with their internal customers throughout the organization (IT, legal, finance, end users), and ensure that all parties are aware of the software license agreements purchasing has negotiated. The benefits? "The next time they need software they will likely come to you first," says Fedele.
  They also work with IT to control the images found on PC of end user groups. A standard image or images throughout the enterprise allows purchasing to control tech support costs and reduce risk of non-compliance (to the agreement).
  Smart software buyers begin detailed record keeping at the onset of the agreement. They do not wait until they're served notice of audit. Once the agreement is signed they go through it and begin documenting items they need to report; identifying key pieces of the agreement. They define the process at the beginning, give someone responsibility for it and make sure records are stored in a central location. They conduct self-audits of the company's compliance to the agreement, tracking usage to ensure the company is not in violation of any contract terms and conditions
  To manage the agreement, software buyers may use contract management software or a simple Access database. They pay strict attention to actions required on their part, and know their obligations under the agreement.