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Best Practices for Technology Development and Sourcing Transactions

  • Best Practices for Technology Development and Sourcing Transactions-

    An alternative to the traditional joint venture model is to replace the corporate component of the joint venture structure and instead to enter into a collaboration or strategic alliance agreement. Such strategic alliance agreements often take the form, in effect, of a complex services agreement in which each party acts as both a customer and a service provider relative to its collaborators. Done well, strategic alliances of this type result in an integrated product or service that each party would be hard-pressed to create and take to market on its own.

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Best Practices for Technology Development and Sourcing Transactions

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  • Best Practices for Technology Development and Sourcing Transactions-10

    An alternative to the traditional joint venture model is to replace the corporate component of the joint venture structure and instead to enter into a collaboration or strategic alliance agreement. Such strategic alliance agreements often take the form, in effect, of a complex services agreement in which each party acts as both a customer and a service provider relative to its collaborators. Done well, strategic alliances of this type result in an integrated product or service that each party would be hard-pressed to create and take to market on its own.

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.