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Consider: We are implementing an ERP for a customer, and we had some bugs that make us lose a lot of time. They were not a result of our modification but on the base software. We had overtime on some tasks, and my boss asked me to visit the customer to explain that he needs to pay a part of the extra hours.

I'm preparing for the meeting, and I would like to know what would be the best approach to explain the situation. (Because the ERP owner will never pay)

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The answer to this is in your contract. How are you contracted with the customer? If time & materials, the customer pays. If cost plus fixed fee, the customer pays but you pay too in terms of your fee margin. If fixed fee, you pay.

Not only do you need to understand the payment terms, but also assumptions and exclusions agreed to in the contract. If fixed fee, there might be a stop loss clause that enables you to go back to the customer if more money to cover these bugs, as an example. If the customer had a Not to Exceed clause in there, you may have had some reporting requirements prior to hitting that ceiling that, if not met, would put YOU on the hook to recover from. If met, then you have good cause to ask for more money.

I am not a contracts expert by any stretch so my examples above are high level. You need to consult with the contracts expert, i.e. legal, to comb through your contract with customer to build a case for more funding OR accept the hit to your profit OR something in between. In addition, I would expect you want to maintain good relations with your customer so you need to consider that, as well, as you comb through your T&Cs of the contract.

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Review the terms of your contract, or have your Contracts Management group do so, if you have such a group. There is often language in a contract of this nature specifying the payment terms for any additional hours or overage expenses. Make sure the contract allows for you to request the customer pay a part of the additional expenses, before you request they do so.

If your contract does not spell it out in specifics, then you will need to negotiate with the customer. In that case, you could explain the situation as follows:

"No off-the-shelf software package is ever completely bug-free. Even when the software publisher provides patches, the licensee is still responsible to expend their own time and effort to install such patches."

That kind of approach along with offering to pay part of the overage costs will show you are approaching the negotiations in good faith.

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