Mediation as a Facilitative Solution to Technology Disputes

The current reporting mechanism in place for the outsourcing agreement, while effective in identifying performance delays and operational deficiencies, was weak in recommending solutions to resolve the issues. The agreement for escalation of operational conflicts was overly complex and did not provide timely and effective resolutions to contractual disputes.

The highly competitive and evolving nature of the industry that the client operated in necessitated changes to the current business and systems processes being managed by the vendor. These needs were not being addressed due to the stalemate that existed in the current working relationship and the inability of the parties to agree to the causes of the current problems and the best method to deal with future anticipated changes.

The client’s business stakeholders were becoming increasingly concerned with the continuing viability of the solution in place and were beginning to explore alternative options.

Both organizations were facing financial pressures to resolve the current stalemate in a timely manner. Litigation was not an alternative that either side desired, due to the cost and time required to reach a resolution, and the negative impact on the business operations.

METHODS
While direct negotiation is often the best way to settle a technology dispute circumstances can arise where an impasse can not be resolved. When this occurs the viability of the business relationship can be impacted.

Facilitative mediation was the most cost effective and timely means of resolving this dispute. Neither party desired to enter into a more formal means of alternative dispute resolution such as a formal mediation or arbitration due to the costs and time required to prepare for and schedule such an event. By bringing the key stakeholders together — including those with settlement authority — the independent facilitator enabled the parties to present their positions to each other. Through direct negotiations and separate meetings with the facilitator, the parties were able to reach a jointly created solution to address their current issues and the needs of the business relationship.

Poor information flow between the participants is often an impediment to the parties moving forward. Parties often hold back key information deemed too confidential to disclose in an open forum especially in situations when the entire relationship is being questioned. A facilitative mediation forum enabled the parties to openly share information with the independent mediator and in part with themselves due to the legal protection that the “without prejudice” format provided. In addition the active participation of the key executive stakeholders in the solution creation increased the probability of reaching a long term sustainable solution.

Using a facilitative  mediation process we call Evolve the parties were able to begin the process of putting the negotiations back on track. Using in-depth information each party shared with him in confidence, the facilitator was able to identify a range of possible solutions for the parties to consider that not only addressed the current situation but also the concerns that each party had about their relationship going forward. Once the parties better understood the available options, with the facilitator’s assistance, they were able to come up with solutions that meet each party’s needs and interests.  An additional benefit in this situation was that the Facilitator because of their technology industry expertise was able to propose solutions to not only the issues at hand but others that had not been identified by the parties as yet. This enabled the group to deal with the issues in both a responsive and pro-active manner making productive use of the time and resources at hand.

The ability of the parties to leverage an independent third party to address their concerns enabled them to explore a variety of options that neither party would have arrived on their own due to the limited information they had in hand. The discussions shifted from a fault finding process to a forward thinking perspective taking into account both the current problems identified as well as the “big picture” strategic issues that needed to be addressed.

The parties to the facilitative negotiation process also found that the industry expertise and experiences of the facilitator contributed to the solution creation process.

RESULTS
The parties reached a clearer understanding of the current issues and their respective responsibilities. They created a unique solution that addressed the root causes of their past problems. The success of their negotiations also resulted in a more effective process to address how the vendor would respond to the future business needs of the client.

The sponsorship of the key business executives in attendance provided the necessary measure of support to ensure the future success of the key initiatives implemented as well as the strengthening of the current business relationship. The ability of the group to come together and address the issues in a matter of days vs weeks (or months) as they had previously done provided a strong incentive to achieve results.

A key benefit of this facilitative session was the ability of the executive stakeholders to discuss in a collaborative format how they would respond to the changing business requirements of the client relative to the outsourced solution currently in place. They were able to address various financial issues such as the investment of both parties in the relationship to date and their needs going forward under changing circumstances both foreseen and unforeseen.

A process was begun to put in place a more clearly defined, results oriented communication and accountability structure that would address the current and future operational requirements on both sides in a more timely and realistic manner. In addition to this key deliverable the executive group in attendance also established a process to meet on a regular basis to review the strategic and big picture goals of their business relationship.

The executive group in attendance later observed that the facilitator made it much easier to meet “face to face” and work through a number of key issues in a more productive and cost effective manner than they had previously experienced.