The Fourth Domain: Why Contracts Matter as Much as Technology

Every transformation consultant talks about People, Process, and Technology.

We add a fourth domain: Contracts.

Here's why.

The Painful Example

Scenario: Government department procures cloud platform.

People: ✅ Trained staff, change managed users Process: ✅ Redesigned workflows, new operating model Technology: ✅ Modern platform, well-architected, performing well

Three months later: Department discovers exit costs of £800K buried in contract terms. They're locked in for 7 years with annual price increases of 12%.

Question: Did the transformation succeed?

Answer: The technology works. The organisation is trapped.

Why Contracts Are a Domain

People, Process, Technology describe what you're transforming.

Contracts determine whether you can sustain it.

Poor contracts undermine brilliant technical strategy. They create:

Vendor lock-in you can't afford to escape
Cost escalation you can't control
Dependency you can't break
Risk you can't mitigate

Common Contract Traps

Trap 1: Exit Costs

Vendor says: "No lock-in, you can leave anytime." Contract says: Data extraction £250K, migration support £300K, format conversion £200K. Reality: £750K to exit = locked in.

Trap 2: Hidden Customization Costs

Vendor says: "Platform price: £2M." Contract says: Customization charged at £1,200/day (uncapped). Reality: £2M becomes £6M over 3 years.

Trap 3: Annual Price Increases

Vendor says: "Industry standard increases." Contract says: "At vendor's discretion, up to prevailing market rates." Reality: 10-15% annual increases (compounding).

Trap 4: IP Ownership

Vendor says: "We'll build what you need." Contract says: "Vendor retains all IP developed." Reality: You paid to build it. They own it. You can't replicate it elsewhere.

The Fourth Domain in Practice

When we assess a transformation, we ask:

People: Do they have the skills? Process: Do the workflows make sense? Technology: Does the platform work? Contracts: Can they afford to change vendors in 5 years?

That last question catches problems the others miss.

Red Flags in Procurement

Watch for:

❌ "Exit costs determined at time of exit"
❌ "Customization charged at our then-current rates"
❌ "Annual price reviews at vendor discretion"
❌ "Vendor owns all developed IP"
❌ "Data portability: best efforts basis"
❌ "Support costs increase with platform adoption"

Every one of these creates long-term dependency.

What Good Looks Like

Exit Costs: Capped in contract (e.g., £50K maximum). Customization: Fixed price or capped daily rate with maximum total. Price Increases: RPI+X% cap (e.g., RPI+2%). IP Ownership: Client owns developed IP or has perpetual license. Data Portability: Mandatory, in open formats, no additional cost. Support Costs: Fixed for contract term or pre-agreed escalation.

Why Most Consultancies Miss This

Reason 1: They're technology or change specialists, not commercial experts. Reason 2: Procurement happens "separately" from transformation advice. Reason 3: They don't see the long-term consequences of bad contracts.

Our view: Commercial strategy IS transformation strategy.

The Lumina Difference

We treat Contracts as a first-class domain because we've seen too many brilliant transformations undermined by poor commercial terms.

We bring commercial expertise to technology strategy. We understand vendor pricing models. We know where the traps are hidden.

Related: