When we talk to people, two of the first questions we always get asked are: “what is escrow?” and “do I need it in my business?”.
What is Escrow?
Essentially, escrow gives you control of the somewhat uncontrollable by permitting an independent specialist to hold and test a copy of the software that you licence from someone else, namely the source code for that particular application. This protects you against the ‘what if’ scenarios and puts you in control of your third party software investments, offering you assurances and continuity for the investments you make.
Why is it essential?
To understand why Software Escrow is essential it is important to recognise the risks of not having an agreement in place, so we’ve identified 6 quick questions that will enable you to identify how your business could be at risk by not having an agreement:
1. Does your business have a Finance System?
2. Does your business have a Logistics System?
3. Does your business have a Reporting Software?
4. Does your business have a CRM Database?
5. Does your business have a ERP?
6. Does your business have a Company Website?
It’s highly likely that you will have answered yes to at least one of the questions above. See below for the potential risks of not protecting these critical applications:
1. If it was your finance system, what would be the impact to your business if you couldn’t invoice your customers, pay your suppliers, pay staff or zero balance your accounts at the end of each day?
2. How would your business be affected if your logistics system, responsible for product/supply control, warehouse management, deliveries or driver management failed?
3. If your reporting system failed and you couldn’t access your KPI’s, how would you be able to make informed business decisions?
4. How would you access vital customer information or close important business deals if it was your CRM System which failed?
5. If your ERP System failed, what would the impact be to your business if your departments couldn’t share information cohesively and effectively?
6. Finally, if your company website went offline, how many potential customers would you lose if they couldn’t research your company, access your contact details or even purchase from you?
A Software Escrow Agreement enables you to mitigate these risks, giving you control of the uncontrollable and protecting you against these ‘what if’ scenarios, providing assurances and continuity for the decisions you make.
As with most things prevention is always better than the cure and this is definitely true when it comes to you business critical software. Setting up a Software Escrow Agreement between yourself, your software developer and your chosen escrow agent protects your critical software by placing a copy of your source code in escrow and creating a release clause so you can access it in the event your software developer can no longer support the application.
To find out more about protecting your critical applications with a Software Escrow Agreement,please get in touch and one of our specialists will get back to you within one business day.
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