A Parallel Running Period clause establishes a defined timeframe during which both the old and new systems, processes, or services operate simultaneously before the old system is decommissioned. During this period, both systems typically run in tandem so that outputs can be compared, validated, and reconciled to ensure the new system is functioning correctly and producing equivalent or superior results. This clause is commonly found in confidentiality-related contracts because parallel running often involves handling sensitive data in duplicate environments, requiring explicit confidentiality protections for information processed in both systems. The clause specifies the duration of parallel running, the parties' obligations to maintain data integrity and security across both environments, and the conditions under which the old system will be shut down.
Why this matters: Parallel running reduces implementation risk by allowing real-world validation before full cutover, but it also creates temporary data security and confidentiality challenges—sensitive information exists in two places simultaneously, increasing exposure risk. A clear clause protects confidential data during this vulnerable transition period and establishes when the heightened security burden ends, preventing indefinite dual-system maintenance costs and confusion about which system is the authoritative source.
Negotiate specific protections for the parallel running period: (1) require that both systems maintain equivalent confidentiality and security controls, with documented evidence of compliance; (2) establish a fixed end date for parallel running (e.g., 30, 60, or 90 days) with clear criteria for extending or shortening the period; (3) specify data handling protocols—which system is the "source of truth," how discrepancies are resolved, and whether data is synchronized in real-time or batch-processed; (4) clarify who has access to data in both systems and require confidentiality acknowledgments from all personnel; and (5) define the decommissioning process for the old system, including secure data deletion or archival. Include audit rights to verify compliance during parallel running.
Frequently Asked Questions
What does this clause mean in simple terms?
A Parallel Running Period clause establishes a defined timeframe during which both the old and new systems, processes, or services operate simultaneously before the old system is decommissioned.
Why should I care about this clause?
During this period, both systems typically run in tandem so that outputs can be compared, validated, and reconciled to ensure the new system is functioning correctly and producing equivalent or superior results.
What are my options?
This clause is commonly found in confidentiality-related contracts because parallel running often involves handling sensitive data in duplicate environments, requiring explicit confidentiality protections for information processed in both systems.
How does this affect small businesses?
The clause specifies the duration of parallel running, the parties' obligations to maintain data integrity and security across both environments, and the conditions under which the old system will be shut down.