Service contract management is different from managing a product procurement based contract. Services by their very nature are much more complex to manage and review, as they are more subjective as to their outcome.
Service contract management is usually undertaken via Service Level Agreements (SLA’s). A Service Level Agreement is usually part of the contract and thus also a formally negotiated contract. The SLA in a service contract management defines the:
When measuring a service contract management, target levels are provided along with minimum levels. When the minimum levels are breached or the SLA is not complied with, there is usually a penalty element.
There are suites of software such as Sap and Oracle that will undertake your service contract management for you. They usually contain the following functionality: