IT Outsourcing & Service Level Agreement
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If you’re about to start IT outsourcing, a few procedures can make this process easier and safer, which you should definitely be familiar with. One of them is signing an SLA (Service-Level Agreement). How to prepare the document and why is it essential for your business?
Service Level Agreement & outsourcing contracts
SLA: what is it? An agreement known as a service level agreement is one that a client and an IT outsourcing service provider sign. Its main objective is to specify the range of provided services as well as their requirements, obligations, and terms. The provider can provide their services more precisely and effectively if the SLA is properly prepared and clearly outlines the client’s objectives and expectations. This kind of agreement is frequently used in a variety of IT-related industries, such as cloud computing and IT service providers in addition to IT outsourcing.
In essence, the SLA’s job is to guarantee the provision of services and unambiguously lay out the terms and regulations of any business collaboration. As a result, signing the contract is an important step in IT outsourcing because it ensures both parties’ security and a satisfying level of collaboration. If an SLA is constructed carefully and contains all necessary clauses, it will greatly aid in clarifying roles within the shared project as well as defining priorities and evaluation techniques.
How to prepare SLA in IT outsourcing?
The decision to sign the document should be carefully considered in light of the significance of a Service Level Agreement in outsourcing services. It should contain a few more clauses in addition to the fundamental ones, like an overview of the agreement, the range of the anticipated work, and a description of the services, like:
Every SLA contract must include a clause specifying the appropriate metrics for gauging the effectiveness of the services rendered. In essence, this is how the caliber of the rendered services will be tracked and assessed. Then, confirm that the SLA’s metrics are significant to you and will aid in your ability to evaluate performance in your key areas.
Remedies for breach
The SLA’s statements may occasionally be misused. Parties should definitely be ready for such situations, and now is a great time to write down the SLA. The contract should clearly state the penalties for violations as well as some circumstances in which they will not be enforced (such as cases of force majeure or delays caused by the client). Particularly in the case of services that are vital to a business, the consequences of a breach must be specified and secured.
Risk management and disaster recovery
It’s crucial to define roles precisely when working with an IT outsourcing partner. The SLA should include a framework for the company’s disaster recovery plan, which should have been created in advance. Thanks to this, everyone will be clear about their responsibilities and able to act accordingly to the agreement in order to efficiently remove the malfunction.
But what happens if the service provider’s performance exceeds the expectations? Well, an SLA can be prepared also for this circumstance. The agreement may include information about the bonus that is gonna be paid to a service provider in case they reach a required goal or indicator. It is recommended especially when the service provider has the power to add significant value to the client’s business and produce an extra profit to share.