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Best Practices for Technology Development and Sourcing Transactions

  • Best Practices for Technology Development and Sourcing Transactions-

    Many companies foster technology innovation by forming joint ventures with other companies with complementary technologies. The joint venture model addresses many of the challenges associated with in-house efforts and outsourcing transactions:

    • joint venturers can share costs and risk of particularly large, complex, and expensive technology development projects;
    • joint venturers can play to their strengths while shoring up weaknesses by leveraging the expertise of another party; and
    • the joint venture structure creates a shared economic interest to encourage joint venturers to make and to share their best efforts.
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Best Practices for Technology Development and Sourcing Transactions

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  • Best Practices for Technology Development and Sourcing Transactions-7

    Many companies foster technology innovation by forming joint ventures with other companies with complementary technologies. The joint venture model addresses many of the challenges associated with in-house efforts and outsourcing transactions:

    • joint venturers can share costs and risk of particularly large, complex, and expensive technology development projects;
    • joint venturers can play to their strengths while shoring up weaknesses by leveraging the expertise of another party; and
    • the joint venture structure creates a shared economic interest to encourage joint venturers to make and to share their best efforts.

In recent years, the pace of technology and business change has rapidly increased, requiring new commercial models and changes to the existing models. Companies – all companies, not just technology companies – must now regularly update technology across their entire organizations and customer-facing services and products.

Successful technology projects boost revenues, distinguish a company and its offerings from the competition, and transform and improve a company’s relationships with its customers. Failure, on the other hand, can have a profound impact on product development, customer service and market reputation for years to come. Consequently, planning for technology innovation and deployment projects requires careful mapping of strategic objectives, deliverables, and realistic work-around options. 

Laurence Jacobs and Nicholas Smith, partners at Milbank, Tweed, Hadley & McCloy, have identified a variety of transaction structures that companies can use to develop new technologies and to leverage existing infrastructure, technologies, and customer bases. They have also focused on the relative strengths and weaknesses of these models in fostering technology innovation and best practices when designing and managing a project to develop and deploy technology or technology services.