You have finally selected an LMS after wading through the marketing
materials from multiple suppliers and demoing individual tools and
features. It is time to green light a selection and sign a
contract. But wait. Here are some issues to consider before sealing
Have legal review the contract
If you have a legal department at your company or a legal
representative associated with your firm, have them review the
contract prior to signing. If they choose to alter the contract,
send it back to the supplier and have them make changes. Once you
receive an updated contract, have legal review this version to
ensure that all changes were made adequately.
If your organization does not have an internal legal department or
outside legal representation, read everything carefully (may take
multiple readings) and check for accuracy. Make sure you are not
giving the supplier unfettered rights to your proprietary courses
and content, the right to use your name without your permission,
and so forth.
Requirements to include
Itemize everything. That's right, everything. For example, state
explicitly the number of and cost for seats your contract entitles
you to. What about an e-commerce module or an additional talent
development module? What about the cost of customer or technical
Include an out or exit clause. If you are signing a multiyear
contract for your system, include an out clause. At the end of each
year, most multiyear contracts auto renew unless you give 30 days
notice prior to the end date of the contract. Avoid 60-day
clauses. Thirty days should give you plenty of time because you
will likely be preparing internally for the split before notifying
Protect your proprietary content. Make sure that everything that is
yours, remains yours. It is as simple as that. Include verbiage in
the contract that content your organization creates and loads into
the LMS, including courseware, ebooks, mp3s, and so forth, returns
to you if you move to another supplier.
They cannot use your company name or logo without your permission.
Most contracts already have this item in place, but have legal
Specify total costs and discount breakouts. Clearly, the total
cost figure is obvious. But you also want to see any discount
percentage breakouts if available (for example, for multiyear
contracts). You should see an original total cost, then discount
break percentage, then the new final total cost. Not, total cost
and they tell you a discount is included.
Items that should be free
I believe certain items should be included as general service, such
as customer service, tech support, and training. For example,
telephone and email communication to discuss something that is
wrong with their system should fall under general service. Caveat:
Only the system administrator should contact the supplier, not
employees or customers.
Be sure to find out the customer service hours and response times
to expect. Does the supplier follow EST or PST; are they available
on weekends or holidays? Have these issues itemized in the contract
and classified as free-of-charge. If this is not specifically
listed in the contract, then you have no idea whether you are
paying for it. regardless of what they are saying.
Under the heading of tech support, the supplier needs to be
responsible for taking care of any bugs in the system. If it stops
working due to a virus, for example. More important, they supplier
should manage the implementation of any non-optional system
upgrades. This includes training.
With regards to training, I wish I could say that 100 percent of
all vendors provide training for free. Unfortunately, here is how
training often works:
- The supplier will train one person (your choice) for free; most
likely via a webinar or a series of them. Sometimes these events
are live events that include other clients, as well. In addition,
your organization will receive training materials (read: PDF) to
distribute to others, and an online FAQ it can access.
- If you want additional employees to receive training, there is
an additional fee. This, of course, begs the question: If training
is via a webinar, how will they know others are viewing it?
- If you want face-to-face training, it almost always costs
extra. Plus you may pay for travel expenses.
Also, many suppliers love to toss in their customer service support
with training, so watch out. It is a package deal! Negotiate at
this point. Also, beware that it often is a salesperson providing
the training rather than an actual trainer.
Addendums are items your organization may consider down the road,
and you want an idea on the potential costs upfront. Here are some
suggested items you may want to have listed in an addendum:
- additional seats; seat packages rather than individual costs
- future talent management modules, such as onboarding,
succession planning, content development
- future social media modules
- e-commerce options, if not already included.
During the final phase of negotiations, you never want to be so
aggressive that it becomes some massive battle. At the same time,
if the supplier is inflexible to points your organization feels
strongly about, it may be ared flag to reassess whether this is the
company you want to partner with potentially for several years.
Before you sign on that line, remember you have some leverage, so
Always request a copy of the contract that has been signed by both
parties. Many companies sign the contract, scan the copy, and email
you a scanned file copy ASAP. But be sure to have a hard copy of
the contractwith their signaturemailed to you.