Posted on Jun 7th, 2007
Posted By TGSI
If projects have been outsourced, they might be for a variety of reasons, from reducing cost to focus on business. Whether the outsourcing arrangement lasts for a long or short period, the performance and quality of the provider must be monitored and targets should be met. In order to measure how well the relation between the client and service provider is working, Service Level Agreements are established. The SLA can make a difference to a solid relationship that lasts for years and keeps both parties happy.
SLAs should be treated like commandments and never broken. It is essential to what goes into a SLA and what should definitely be in it, in technical terms-metrics. The contents of a SLA can be viewed at http://www.outsourcing-toolkit.com. The service provider should state clearly in the SLA how the service is to be provided, with regard to the software and hardware.
The first goal should be the measurements that motivate the right behavior and each side must understand the other side, expectations, goals and the factors that are within control. You should ask only for what you need and identify and protect the most important and critical organizational assets. A few SLAs guarantee how fast the service provider will respond to your service requests, how long upgrades will take, how fast service providers will detect and report problems, and so forth. Another critical consideration is how the service provider will be penalized if the service level guarantee is not met. In most cases it simply means that the service provider won’t bill you for that period of time.
Then you should define your criteria and how you will continuously monitor them, cover the best and worst case situations in the agreement and make sure that the penalties are fair. The third would be to choose rewards with care and keep them to a minimum and demand continuous improvement from the provider. This should include the staff and management, so that data or work handled would be treated with a sense of importance.
And the last but very important aspect is that you should assign a representative from your business set-up to follow up on the execution of the SLA and always include an exit strategy. This is in case of a disaster or any unforeseen problematic situation that threatens the existence of the company.
With proper planning, a company can create an outsourcing SLA that will meet its organizational needs. Be clear about best- and worst-case scenarios and draft the SLA in partnership with the provider, emphasizing the processes that ensure that terms are being met and that service continues to improve.