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January 25th, 2022 (Updated 04/21/2022) | 10 min. read

Ryan Farrell
General Counsel in Legal at Pricefx

Buying Enterprise Pricing Software: Key Documents for Success

So, you’ve made the decision that you will be buying enterprise pricing software for your large-scale business. Congratulations on getting onboard with the latest pricing industry trends and business solutions. You have a Procurement Department that usually takes care of such matters. However, as the C-level Manager responsible for driving the implementation of pricing software, you also want to know what is involved for yourself.  

As you sift through your checklist of what is required to get the software implemented and up-and-running, you have begun to realize there is a set of key documents you will need to put in place. Of course, you don’t want to lose momentum and naturally, you’re looking to get the power of the software driving your pricing ASAP.  

At Pricefx, we regularly assist our large-scale enterprise clients to complete the required documentation as seamlessly, quickly, and painlessly as possible. 

In this article, we’ll outline the 4 key documents that you will require to officially complete the purchase of pricing software, why negotiation of contracts and other documents are expected, and how the document preparation itself should be treated as a standalone project to manage.

4 Key Documents Likely Involved in Purchasing Pricing Software

While the naming of documents may vary been pricing software vendors, there are 5 key documents that you will need to complete in purchasing software for pricing purposes that we will discuss in detail in this article; 

  1. Master Service Agreement (MSA)  
  2. Statement of Work (SOW) 
  3. Data Processing Agreement (DPA) 
  4. Non-Disclosure Agreement (NDA) 

1. Master Service Agreement (MSA) 

What is it? 

In the provision of enterprise pricing software, the MSA is the governing contract under which all other documents involved in the purchase and implementation fall (e.g., purchase orders, statements of work, and other service contracts). Some pricing software providers may refer in-house to their MSA as simply their order form or ‘terms and conditions paperwork.’  

Most, if not all, pricing software vendors will have their own template MSA that is catered to their business, including their commercial model and their willingness to take on certain risks and obligations. Customers should expect to be required to start negotiations on their vendors’ templates. 

Why is it important & How Is It Used? 

When it comes to inking the deal, the MSA is the most important document. Its status as the controlling document means that its terms apply to—and can affect—each aspect of the purchase and implementation. It frames the scope of the software provision regardless of size or region of the customer and memorializes important legal and commercial agreements between the pricing software provider and the customer. 

The MSA (often referred to as the “Order Form”) includes a variety of important terms, including the products to which our customer subscribes, how long the subscription term is, and how customers are expected to pay for the subscription. Without the MSA, you will not have your pricing software and the vendor will not have you officially as their customer. 

For both pricing software client and vendor, having the MSA signed, sealed, and delivered as early as possible will facilitate having your pricing software live ASAP. 

Who Should Be Involved in the MSA preparation/signing in your company? 

  • Accounting/Finance Department 
  • Pricing Department (if you have one) 
  • Procurement Department 
  • IT (Information Technology) Department 
  • Security/Cybersecurity 
  • Legal Department 

2. Statement of Work (SOW)

Handshake-Agreement 

What is it? 

A statement of work (frequently shortened to “SOW”) is a more technical document that outlines tasks, deliverables, and goals for implementing pricing software successfully. SOWs provide a lot of detail regarding the implementation, including, but not limited to; 

  • Individuals (customer and vendor) responsible for the implementation 
  • Specific implementation tasks and deliverables (for both customer and vendor) 
  • Deadlines for completing tasks, deliverables, and the overall project 
  • Lock-in times 
  • Length of Terms & Renewals
  • Automatic renewal or re-negotiation required?
  • Implementation Phases and Timeframes
  • Fees and billing structure for the performance of the implementation 

Why is it important & How is it Used? 

An SOW is created to keep everyone in the pricing software project on the same page around deadlines, scope of work, and project expectations. Creating an SOW helps both customers and the vendors of pricing software to stay aligned and reach their project goals together as a functioning team. 

A good SOW functions as both a contract and a project management tool. For example, if your company is employing a CPQ (Configure Price Quote) solution to streamline production of your quotes for your website, the SOW between your company and your provider may include expectations for a streamlining an uncomplicated workflow approval process for your quotes, and clear pricing guidelines taking all your promotions and rebates into account.  

Having a detailed, written breakdown of all the pricing software project aspects signed by all parties will make it easier to hold everyone accountable for their end of the deal. 

Who Should Be Involved in the SOW preparation/signing in your company? 

  • Accounting/Finance Department 
  • Pricing Department (if you have one) 
  • Procurement Department 
  • IT Department 
  • Security/Cybersecurity
  • Legal Department 

3. Data Processing Agreement (DPA)

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What is a DPA? 

Data Processing Agreements / Addenda (often shortened to “DPA”) are a type of contract that covers the rights and obligations of customer and vendor concerning processing of data, typically related specifically to personal data. DPAs have risen in popularity over the past 4 years as a compliance requirement under the General Data Protection Regulation (an EU-wide data privacy law commonly referred to as the “GDPR”) and similar laws. However, over time some companies have begun to require DPAs even where the GDPR (or another law) does not require one. DPAs are usually supplied by the pricing software vendor. 

Why is are DPAs important & How Is Are They Used? 

As noted above, a DPA may need to be signed to ensure compliance by both customers and vendors with applicable data protection laws. Companies leveraging data on EU residents in their pricing software likely require a GDPR-compliant DPA any time that data is processed by their provider.  

Even if not required, a DPA may prove advantageous for outlining the terms of vendor’s processing of customer data. However, customers and vendors both need to consider the advantages of a DPA in light of the added rights and responsibilities each may be taking on in signing a DPA. 

Who Should Be Involved in the DPA preparation/signing in your company? 

  • Procurement Department 
  • IT Department 
  • Security/Cybersecurity 
  • Compliance Department
  • Legal Department 

Separate from, but related to, DPAs, pricing software vendors know that many companies maintain extensive data security and privacy requirements to ensure safe and secure handling of their pricing data.  

While many (including Pricefx) maintain industry-standard certifications like ISO 27001 and SOC2 (Service Organization Control), you might want to incorporate customer-specific security and privacy terms into the MSA.  

We encourage customers to notify vendors as soon as possible in the contract negotiation process of these types of requirements, as data security and privacy are sensitive topics that often require discussion and negotiation.

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4. Non-Disclosure Agreement (NDA)

What is it? 

A non-disclosure agreement (or “NDA”) is a contract that establishes a confidential relationship between the parties signing it. This means that the parties agree that confidential information they may obtain from the other party will not be made available to others (subject to limited exceptions) and will not be used other than for specific, limited purposes. An NDA can also be referred to as a “confidentiality agreement.” 

Why is it important & How Is It Used? 

NDAs protect the parties’ most sensitive and valuable information. Without an NDA in place, each party’s obligations to keep the other’s information confidential are limited to what is required under applicable law, which can be much narrower than what a party wants or needs.  

If you want to protect your business against unforeseen use or disclosure of your confidential information (specifically, any pricing data made available in discussions prior to signing the MSA), an NDA will be critical. 

Many (if not all) vendor MSAs will include confidentiality provisions. This means that, whether or not you and your vendor have signed an NDA, each party can be comfortable during the actual relationship that its confidential information is being protected. If you have signed an NDA before the MSA, you should expect that document to be replaced by the confidentiality terms in the MSA. 

Who Should Be Involved in the NDA preparation/signing in your company? 

  • Legal Department 

Make the Key Document Collection a Standalone Project

Buying enterprise pricing software is a big expense and there is a lot more to the process than initially meets the eye. 

What many potential pricing software customers do not realize is that scoping, buying, and implementing the software is an intensive process with distinct phases. The software itself is a powerful pricing tool in many cases driven by the latest in Artificial Intelligence (AI) and Machine Learning. Setting up pricing software is not a straightforward process like downloading Google Chrome, where you simply download and can use the tool within 30 seconds. 

Phases_of_a_Pricing_Project_Button

As a rule of thumb, do not underestimate the level of commitment and time that your company will require to set negotiate and execute the key documents required for purchasing software. If you do have staff experienced in project management and/or any of the teams listed above with respect to specific documents, get them involved as soon as possible, and don’t leave everything to your Pricing Manager. 

Why Negotiation of Contracts & Other Documents is Expected 

Reinforcing the theme of checking, double-checking, and spending the time to dot the i’s and cross all the t’s of your documentation collection, we cannot emphasize strongly enough to negotiate and/or provide direct and honest feedback on any paperwork your proposed pricing software vendor provides to you. 

It is much easier to solve any issues and/or address any lingering doubts before the paperwork is signed. If there is something missing in your paperwork that you feel really must be there, don’t be bashful in letting your proposed pricing software vendor what you need included (or for that matter, excluded). 

Keep in mind, though, that neither party is likely to get everything they want included in a contract. This back-and-forth is normal and should be factored into your planning. Don’t take objections or arguments personally, as everyone is looking for the same thing: a strong relationship built on mutual trust and understanding. 

Trust us when we say this, fixing a problem sentence or headache paragraph is far simpler before signing key documents than afterwards. 

Is There More I Need to Know Before I Start Compiling Paperwork? 

Now you know the key documentation that you will require to buy enterprise pricing software. However, there are a few more things you’ll need to get your chosen pricing software solution launched, live and using its power to grow your bottom-line ASAP. 

If you have spent any time in the world of pricing software as we have here at Pricefx, you’ll be fully aware that having a clean set of complete data will also be critical to optimizing the power of pricing in your business.  

It is exactly why we have put this article together on The 3 Data Sets You Need for Pricing Software Implementation. 

On the other hand, if you already have your documentation and data ducks in a row and you’re ready to go, the time has well and truly arrived to:

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