How To Successfully Do A Service Contract Management?

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:

  • Services
    This is the scope and type of services that are expected.

  • Responsibilities
    This details the responsibility of each party. It may include job descriptions and who is responsible to produce what and whom they are managing.

  • Priorities
    This is what should be produced first and what takes precedence where there are two requirements or responsibilities.

  • Deliverables
    This is what is to be produced by the services. It usually describes the products to be produced and their quality measurements.

  • Warranties
    Many purchasers require warranties and guarantees that the services purchased will provide the business or technological improvements that are requested and paid for.

  • Availability
    This defines when the services will be available and when staff will be available to work on the project.

  • Performance
    This is a measurement of the service performance.
In fact everything to do with the level of service that is to be expected from the vendor.

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:

  • Service agreement production.
  • Service contract management.
  • SLA management.
  • Performance management.
  • Service contract management information.
There are four main areas where SLA’s are very common and these are:
  • Cleaning
    This is a where turning up is not a payable service. Companies pay for their premises to be cleaned so the SLA will require some description of the level of cleanliness required as well as how often the cleaning has to be undertaken.

  • Facilities management
    This is a complex service that requires a number of diverse services under one overall service. There will be a requirement for a number of SLA’s all detailing different service levels required.

  • Security
    Whilst many companies require service to be available and on site, they also require zero security breaches, so the SLA will define what happens should this happen.

  • Information Technology
    This is a complex area and IT is usually required to solve a business problem. Thus, the SLA will require this business problem to be solved to a defined level.
Service contract management is complex and needs a really good Service Level Agreements to define specific performance requirements.


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