Practical know-how of the Global Project

Hitoshi Goto

Ukihiko Takagi

In Part 7, we discussed "IT technology unique to Japan" that is not applicable to overseas projects. This time, we will examine how to cope with the Warranty Period, which varies from country to country.

There are some countries where the Warranty Period is for thirty days.

Even in the Part 5, there have been discussions of laws and regulations, but is is a description of laws and regulations that should be incorporated into ERP as business requirements. The following section describes the laws and customs that must be considered when working overseas.

System development in Japan is often carried out under fixed fee contracts, and in that case, the warranty period is one year or less under the Japanese Civil Code, and it is a "liability without fault" (even if the contractor is not fault, there is responsibility to modify). However, because the contract takes precedence clauses, depending on the contract, the warranty period might be six months, and it might become "liability with fault" instead of "liability without fault".

Nevertheless, it is common practice to say that there is warranty against defect for a year after the acceptance inspection, and it may be six months for the development of a small size system.

However, this "common practice" was not applicable in Brazil. When we asked the local ERP vendor to customize to a considerable volume, we were asked to sign a 30-day warranty.

Well then, because we cannot manage the responsibility of deliverables, we had to negotiate hard with the vendor, but it was finally agreed to extend only fifteen days. The same is also applied for India, which is usually one month. On the other hand, in some countries and regions, the warranty period is long. This is the case in China, which is usually two years.

Regarding the period, clearly state it in the contract or in the Statement of Work.

The important thing is how we should deal with it in countries and regions where the short-term warranty period is common. There are two important points.

TThe first point is clarification in the contract. This is the same as in Japan because it is common practice to specify the warranty of defects in the contract.

It is not very popular in Japan, but in many countries and regions overseas, it is common to specify warranty period in the SOW (Statement of Work) rather than in contracts. In this case, it should be specified in the SOW. However, since the SOW is often described as an "non-binding target," it is necessary to pay attention to whether it is expressed as such.

Nevertheless, in some countries, such as Brazil, even if it is negotiated, but it becomes only a month and a half. In other countries and regions, Japan's one-year custom cannot be accepted. Therefore, the second point is to consider quality management based on the assumption that the warranty period is short.

There are two major measures to be taken in this case.

One is to perform acceptance tests more thoroughly than those in domestic projects. In addition to ensuring that the user company on the ordering side has a organization and a period for testing, it is also necessary to consider test cases as thoroughly as possible.

The other is to budget the cost of fixing initial defects on the order side. If you cannot fix it for free, you have to make a budget.

The budgeting of cost of fixing initial defects is also effective in Japan, although it is a little out of the theme of the global project. This is because, even in domestic projects (especially in the case of phase-by-phase divided orders), defect liability is likely to be troublesome because the defect responsibility changes depending on where the defect-causing process is in the requirements definition, design, manufacturing, and testing.

As a concept of budgeting, it is practical to secure a large number of development resources until stable operation.

<<Read [Part 7]Read [Part 9]>>

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