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:
This is the scope and type of services that are expected.
This details the responsibility of each party. It may include job
descriptions and who is responsible to produce what and whom they are
This is what should be produced first and what takes precedence where there are two requirements or responsibilities.
This is what is to be produced by the services. It usually describes
the products to be produced and their quality measurements.
Many purchasers require warranties and guarantees that the services
purchased will provide the business or technological improvements that
are requested and paid for.
This defines when the services will be available and when staff will be available to work on the project.
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
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:
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.
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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