Avoiding Vendor Tricks and Traps

Avoiding Vendor Tricks and Traps
By Kevin Kruse

Developing online learning programs requires a variety of advanced skills. These include instructional design, writing, graphic art, programming, and sometimes, audio and video production. Because few developers are able to master all of these talents and most organizations don't maintain in-house resources for them all, outside consulting companies are often needed to assist in program development.

While many vendors realize that looking out for your long-term interest is the best way to remain your partner, many technology-based training companies rely on certain tricks and traps to try to win accounts and lock in repeat business. Often buried in the fine print of contracts or presented as unique features, these "incentives" sometimes result in short-term price savings. But in each case, the long-term effect is detrimental to the client.

When choosing a partner for development work, make sure you investigate the vendors' approach to these topics and avoid falling into the following traps.

Trap 1: Ownership of the source code

The source code, or computer instructions, is the unencrypted data that makes up your digital learning courseware. This includes the HTML, JavaScript, and Java code in many online learning programs, and the Authorware or Director source files for multimedia programs. Many vendors keep the source files and hold the copyright to them, which prevents you, the client, from making changes to the program on your own. Retaining the source code gives the vendor tremendous power over the client. If you're dissatisfied in the middle of the project, you cannot fire the vendor without having to start the project from scratch. More commonly, when you return to the vendor in the future for minor updates to the program, you may discover that you'll be charged exorbitant rates for the updates. Without ownership of source code, you have no choice but to pay the high fees because it's cheaper than creating the program all over again.

Make it clear in your RFP or contract that all unencrypted source files and programmer notes will be turned over to you and that you have the right to maintain the program yourself in the future. Many vendors intentionally encrypt their work to prevent others from accessing it, so make sure to check that CD-ROM when it comes in. Then file it in a safe place!

Trap 2: Ownership of content

Ownership of the content is as important as owning the source code. If a vendor holds exclusive copyright to the words, images, and videos that appear in your program, then only that vendor has the legal authority to change the content or reuse it in a modified program. Most vendors have a legitimate need to protect their intellectual property and need to be able to reuse part of the content on other projects. As the client, however, you need to make sure that you have the right to use, modify, and reuse the content that was created for you under common work-for-hire arrangements.

Trap 3: Additional fees for project expenses

Some vendors bundle all expenses into the project fee, while others bill for individual items. Just be sure you know in advance how your vendor operates. Vendors can charge for photocopies, phone calls, postage, faxes, office supplies, administrative assistance, and travel. These fees add an additional 5 to 15 percent to a project total. If your vendor charges for expenses, make sure to get a detailed list of which items will be charged, find out the exact cost per item, and insist on receiving all receipts or detailed records of materials used.

Trap 4: Costs for program updates

If you own the copyright to the source code and content, you're likely to get competitive rates for time and materials, since you can always turn to another vendor. Never accept flat fees or percentage fees for changes. For example, some vendors will charge $2,500 plus $1,000 per day for changes. If you sign such an agreement, you could pay $3,500 for the vendor to change the word cat to dog on one screen, even though it may take only an hour of time. The best deal is to allow the vendor to charge normal hourly rates ($75 to $175) and expenses for any future updates.

Trap 5: Vendors' use of a proprietary software engine

A software engine, sometimes called a black box, is a program that automatically processes data, such as content stored in a separate database. For example, an engine might specify where to place text or position a photograph on a screen. Because an engine is built once and the content is easily added or changed in the database, a large amount of multimedia training can be developed for a relatively low cost. However, the approach often yields linear "page turners" in which each page looks the same and there's little interactivity or room for creativity.

Many vendors consider their engine to be proprietary technology and refuse to turn it over to their clients. Similarly, many vendors have created proprietary development languages or models that enable them to reduce the time and cost of program development. While this may cut development time for the vendor, it also means that you, the client, will have to return to the same company for future updates and changes, even if you're dissatisfied with the prices or service.

It's wise to avoid having your training programs produced with proprietary programs of any type. You will be forever shackled to the vendor who may or may not even be in business in two or three years when you need changes. Your initial investment becomes worthless if it needs to be updated and cannot be altered. Today, there are many excellent, easy-to-use tools on the market that are common among all vendors. Insist that your vendor use a standard programming or authoring tool such as HTML, JavaScript, Java, Flash, Authorware, Director, Shockwave, or ToolBook.

Trap 6: Vendors' use of freelance developers

It's easy for a vendor company to present itself as being capable of all services you need. Whatever it is you want, they say they'll do it. The truth in many cases is that the company does not have in-house capabilities in every area of multimedia development. Instead, certain tasks are subcontracted to a freelancer or another development company.

While there's nothing wrong in theory with using freelancers, there are some pitfalls. Freelancers can help keep costs down and bring specialized expertise to a particular job, but they present a risk to you, the client. When a vendor uses freelancers, you often don't know who's really working on your project. Neither the vendor nor you are in control of the freelancer. What happens if the person becomes ill, moves away, or takes a full-time job? What leverage will you have to ensure project completion?

Make sure you ask in the RFP or follow-up meetings that the vendor specify the team members working on your project and identify which are full-time employees and which are employed on a freelance or contract basis. If they're using freelancers, ask for resumes or biographies of their experience, and ask about your vendor's "bench strength" or ability to replace the freelancer in a worst-case situation.

Technology-based training vendors are often your critical partners in achieving important business goals; most are honest, fair, and hardworking. However, some vendors will take advantage of less experienced training managers or use techniques outlined above to maintain a long-term advantage. By addressing these issues at the project start, you can protect your organization's investment over the long term.

Published: April 2000

Kevin Kruse is a principal of Raymond Karsan Associates, a developer of online learning solutions. He is also the author of Technology-based Training: The Art and Science of Design, Development, and Delivery. More information on Kruse and his book, including three sample chapters, can be found at www.TBTSuperSite.com.