Service Level Agreement Risk

However, in the case of critical services, customers should invest in third-party tools to automatically collect sLA performance data that provide objective performance measurement. IT outsourcing agreements, in which the remuneration of service providers is linked to the results obtained, have gained popularity, with companies developing from time and pure materials or full-time price models. SLAs are an important part of any subcontracting and technology provider contract. Beyond expectations for type and quality of service, ALS offers remedies if requirements are not met. Customers can create common metrics with multiple service providers that take into account the multi-supplier impact and impact the creditor may have on processes that are not considered to be in compliance with the contract. Service availability: The time available to use the service. This can be measured using the time window, z.B 99.5% availability between hours 8 a.m. and 6 p.m. and more or less availability at other times. E-commerce processes are generally extremely aggressive. 99.999 percent operating time is an unusual requirement for a website that generates millions of dollars per hour. Measures should be designed so that bad conduct is not rewarded by both parties.

If z.B. a service level is violated because the customer does not provide information on time, the provider should not be penalized. Until now, the public cloud has been very reliable, but if there is a disaster with a provider, there is no financial ambition to rebuild your failing business if it operates entirely on a cloud. What if you create a private cloud? Suppliers who sell hardware or software may be willing to offer better terms for ALS. In the storage world, we have the myth of five, six or even seven 9 availability. We discussed this recently in a Storage Unpacked podcast. A single storage application cannot guarantee 99.999% availability, but on average, this level can be reached on systems provided by the manufacturer – and higher. If a single storage table breaks down, the supplier can afford to compensate the customer, as the cost of compensation is distributed among all other customers with work-ready products. This last point is crucial.

Service requirements and supplier functions are changing, so it is necessary to ensure that ALS is kept up to date. Most service providers have standard SLAs – sometimes several, which reflect different levels of service at different prices – which can be a good starting point for negotiations. However, these should be audited and modified by the client and the lawyer, as they are generally favourable to the supplier. The goal should be to fairly integrate good practices and requirements that maintain service efficiency and avoid additional costs. The SLA metrics required depend on the services provided. Many elements can be monitored as part of an ALS, but the scheme should be kept as simple as possible to avoid confusion and excessive costs on both sides.

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