Nobody’s perfect, and I’ll be the first to admit that. As long as I can remember, I’ve always been stubborn in one way or another. To be perfectly honest, I always think I have things under control and I rarely look for assistance when it comes to solving my own problems. My favorite response to everything is usually, “I know,” before anyone has a chance to say anything. I’m also really good at taking on commitments that always result in more work than they should have been. For example, thinking it would be a good idea to take my daughter and her four friends to an Ed Sheeran concert. Long story short, if I’m ever in that situation again, my plan will be to buy the tickets and let Mom take the girls!

The analogy here, as it relates to managing your software or source code escrow agreement, is that you need a team! The people responsible for setting up the agreement are usually the ones that are in the know about escrow – they buy the tickets and pick out the seats for the concert. However, once the escrow agreement is established, another set of tasks is required and these take different skills – like arranging transportation and being responsible for the kids in my concert analogy. In most cases, these jobs are handled by different people. What’s important to realize is that it takes a team to make everything work seamlessly.

A Cross-Functional Team to Support the Escrow Process

To design and support a repeatable process for software escrow, it’s important to start with a cross-functional team. In the case of a software buyer or licensee, this core team should represent all the departments that input into the risk management policy and processes you are trying to create for your organization.

We typically see that a core team includes representation from the business owner for each license agreement, IT staff that will implement the technology, procurement, legal, and risk management. The best teams have no more than four to six members and include a senior executive sponsor to help add credibility, visibility, and assist in cutting through red tape. The takeaway here is that all the departments you need to support your escrow initiative should have a seat at the table.

This core team will establish a set of criteria to determine which technologies will require an escrow provision in their license agreement. They can then create a repeatable process that simplifies your ability to manage your technology investments with each developer going forward.

The Designated Contact Role is Essential

Once a software escrow agreement has been established, both the licensee and the developer will identify a designated contact person for the agreement. These people are the single points of contact within their organizations that the escrow provider (such as Iron Mountain) will communicate with for the execution of the escrow agreement. They play a critical role in the management and implementation of an effective escrow program. If you’re a designated contact for a software escrow account, check out this video on your responsibilities as the point of contact for the agreement.

The designated contact for an escrow agreement can really be anyone in the company but is typically someone from the line of business using the software. It is essential that the designated contact is timely and responsive. If a new member on the team inherits the responsibility of designated contact, their contact information must be updated on the escrow account to keep the agreement running smoothly.

Managing the Software Escrow Account

Most third-party escrow service providers will provide an online portal for managing all your escrow activity. (If you have an escrow account with Iron Mountain, you’ll manage it through our Escrow Management Center.) This portal is a lot like an online banking system, where you have to ability to see activity in your account, but you do not have access to the money (i.e. the software source code). Your online escrow system can give user rights to the team members and set alerts for new deposit reminders and other tasks. The right team, a responsible designated contact, and active uses of the online portal all add up to a well-managed software escrow account. With well-managed escrow relationships, you’ll ensure that the corporate strategy is being followed and that all your business-critical software agreements are protected and in compliance.

In my next post, we’ll discuss the anatomy of the escrow agreement by dissecting the areas/requirements of the agreement so that each party can easily understand the purpose and goal of their particular agreement. I’m sure if it’s your first time looking at a technology escrow agreement it probably looks like hieroglyphics on an ancient Egyptian wall. But I promise it’s really easy to understand once you figure out the “code” to the agreement.