Why enter into a Service Level Agreement (SLA)?
Setting, tracking, and managing Service Level Agreements is an important aspect of customer relations if you are a vendor, and outsourcing management if you are a consumer of technology services.
Service Levels should be negotiated up front as part of the outsourcing contract and consistently utilised as one of the primary tools of outsourcing governance.
Failure to adequately define and manage Service Levels (more specific to ICT services) may result in:
Inefficient organisations; lack of productivity
Wasted expenditure including wasted costs on software or hardware purchased
Costly and time consuming litigation to terminate an agreement
Failure to achieve the organisation’s IT goals and objectives
A Well Drafted Service Level Agreement...
Identifies and defines the requirements of the client
Provides a framework for understanding scope of work
Simplifies complex issues
Reduces areas of conflict
Encourages efficient escalation and resolution of disputes
Provides for realistic expectations and parameters
Establishes the penalties and remedies for failure to meet Service Levels
In our experience, the following critical aspects of outsourcing management must be addressed in Service Level Agreements:
Performance, tracking and reporting
Legal compliance
Third party dependencies
Subcontractor relationships that service provider may enter into and the terms thereof
Exclusive relationship with the Third-partyservice provider and the circumstances under which a client may engage other service providers
Service provider’s duties and responsibilities
Security and information security
Intellectual property rights and confidential information; and
Conditions for termination of the Contract
The content in this article was provided by Pria Chetty, Chetty Law – Technology and Innovation Law, the response to the call for specialist and dedicated technology law services in South Africa
Please Note: The content of this article does not constitute legal advice. Specific queries should be directed to Chetty Law or other suitably qualified attorneys in order to obtain relevant specific and/or appropriate legal advice.