Tag Archives: Enhancement

How Do You Improve Quote to Collections Flow? Four Tactics

Situation: A company is losing billings because individual billings are getting lost in their process flow. Requests for enhancements come from clients to Project Managers. Project Managers take on development of the enhancements but are sometimes too busy to keep track and don’t report their work to the billing department. How do you improve quote to collections flow?

Advice from the CEOs:

  • It appears that two processes are missing:
    • A formal trigger mechanism to assure that a PO is in place BEFORE Project Managers undertake enhancement work, and
    • Managers are incentivized to assure that the client is billed and revenue collected for the work performed.
  • Formalize the process and do not allow Project Mangers to initiate any work until a work request is logged in the billing system and a PO is received from the customer to cover the expense.
    • Develop a process to track customer requests, estimate development and transmission to billing, forwarding of estimates by billing to the customer with a request for a PO, and upon receipt of PO authorization by billing to initiate work.
    • This can all be tracked and managed by most accounting software packages.
    • This process will:
      • Facilitate tracking of actual expense vs. estimate;
      • Tracking of requests for which no POs are received, for client follow-up; and
      • Tracking of enhancement requests to guide future product development.
  • Compensate Account Managers to track and manage the process.
    • If an Account Manager receives a commission for enhancement work they will have an incentive to keep track of all ongoing work, both for timely delivery and to assure that the customer invoiced for the work.
    • Commissions paid to the Account Mangers will be a small percent of the extra revenue collected.
    • To improve process management, schedule regular meetings to review all enhancement and other work being done for clients. Review and assure that all work has accompanying POs, that the work is being completed on a timely basis and in line with original estimates, and that the company is invoicing and being paid for the work. Empower Account Managers to organize and conduct these meetings. Their incentive will be the commissions they will collect on payment for the work.
  • Build upgrades and a certain number of enhancements into the product price.
    • This enables to company to increase prices and to collect prepayment for enhancements and upgrades that may or may not be requested.
    • Use the process outlined above to track enhancements which are credited against the prepaid accounts, and to assure that enhancements above the prepaid limit are invoiced.

What Are The Key Factors to Negotiating an IP Acquisition? Six Considerations

Situation:  The Company is interested in acquiring either the intellectual property (IP) of another company or the company itself. The target is a minor division of a larger parent company. The CEO contacted the parent and confirmed their interest in a deal. What are the key factors to negotiating an IP acquisition?

Advice from the CEOs:

  • You need to assure your rights to both current IP and future enhancements. This applies whether you or the parent is the final holder of the IP.
    • Look for clear language as to what constitutes base IP, derivative IP and extensions of the IP. You want to preserve your interest in future derivatives and extensions that you create.
  • There is a material difference between your position and the parent’s.
    • If the parent retains the IP, they also gain certain rights to IP extensions based on the current IP. If you own the IP, their potential rights to future IP are lost.
    • If the parent feels that the IP has strategic value – whether or not they are currently taking advantage of it – this will be one of the more difficult aspects to the negotiation.
  • What options are there besides acquiring the company?
    • The parent can grant a fully paid license to the technology, with access to the people and assets, waiving residual rights to future IP extensions, and no restrictions on transfer.
    • Another option could be a one-time royalty fee that is a perpetual license.
  • Within your due diligence, try to get a sense of the parent’s motivations and concerns for entertaining your interest in the acquisition. This will help you to frame a deal that works for both parties.
  • If the parent has been an active licensor or seller of IP, look for lawyers who know the company. Try to secure one of these as counsel for your negotiation.
  • From a liability standpoint, it is better to buy or license the IP and technology than the company. Liability travels with the company. Part of your negotiation will be who inherits any carry-over liability.

Key Words: Intellectual Property, IP, Acquisition, Rights, Enhancement, Derivative, Negotiation, License, Royalty, Legal Counsel, Liability