Service level agreement
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Negotiation Anatomy™
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A service level agreement (“fondly”[1] known as an SLA — that is an ess-ell-aye, not a “slah”) defines the level of service you expect from a vendor, laying out the metrics by which the service is measured, and your remedies and penalties should agreed-on service levels not be achieved.
It is a critical component of any vendor contract.
Thus, in a stroke, the SLA demonstrates the folly of outsourcing: an internal resource may be expensive, truculent, workshy and in need of holidays and a pension, but (at least in theory) to get a decent job out of her you don’t need an SLA[2]: the better the job she does, the more the bonus she’ll get![3]
But once you have outsourced the role to a free agent patrolling the free market, that calculus, however delusional it may be, changes.
Now, unless you are a fool, your starting assumption must be that your agent will do as little as he humanly can to comply with the most pedantically literal possible reading of your agreement. To do a stroke more is economically irrational (so sayeth the Smiths, Friedmen and Hayeks of economic history). Your service provider has agreed a fixed fee for its services, it is his sole and constant interest to expend as few resources as are humanly possible to earn that fee.
The difference between the fee and those resources is his profit margin. A free agent is exclusively focused on what it does not have to do. This, and only this, is what he turns up for.
Thus, you must have an SLA. You must stipulate in horrific detail exactly how, when, with what implements and at what rate, your service provider must provide the services. You should expect it to do not one micron more than that.
If you outsource a cleaning contract for a five-thousand seat tower block in the CBD, assume your service provider will roll up with one minimum-waged fifteen year-old, a mop and a plastic bucket UNLESS YOU HAVE AGREED OTHERWISE IN AN SLA.
See also
References
- ↑ Few people who have ever been party to one look upon an SLA with any kind of fondness
- ↑ This won’t stop middle management trying to impose one, of course.
- ↑ IN THEORY. OK, folks: I know it doesn’t really work like this (GOD KNOWS I know that) but the collective is often gripped with a madness a crowdish delusion that it is somehow different.