February 2020 – CIOs establish effective SaaS relationships when roles and expectations are clearly defined, with attention dedicated to outlining project scope, measuring expected services, and preparing for the future. SaaS relationships provide unique challenges from a contract and process perspective. By anticipating and negotiating provisions for possible business changes or the eventual termination of the relationship, insurers can work to future proof contracts and prepare for their extended durations.

This CIO Checklist provides a set of guidelines and principles that identify pitfalls and help address potential issues in Software-as-a-Service contracts. It is the third in a series of briefs on establishing effective service provider relationships.

The Checklist

• Identify needed components
• Define services, roles, and responsibilities for both parties
• Outline cost models
• Prepare for changes in business volumes and models
• Plan for organizational changes, licensing of affiliates, and acquisitions
• Define exit clauses
• Outline service-level agreements (SLAs)
• Create escalation procedures
• Establish incentives and penalties