The document discusses service level agreements (SLAs) between companies and vendors. It provides the following key points: - SLAs define expectations for performance, responsibilities, and metrics to measure the success of the vendor. They are an important legal agreement between the parties. - SLAs should include metrics for assessing financial performance, responsiveness, technology utilization, processes, employee-related factors, customer satisfaction, and other deliverables. - Properly utilized, SLAs help companies evaluate vendor performance, receive expected services, and manage changing expectations over time. However, SLAs are sometimes overlooked or underutilized.

1. The Pros and Cons of
Service Level Agreements
(SLAs)
Joann Martin, Global Director of BPO and Vendor Management Pitney Bowes

3. o It is the first significant agreement on direction
between the two teams
o It is a legal agreement between your company and the
vendor.
o It should demonstrate to the vendor what is important
to your company
o It will demonstrate what you want the vendor to focus
on by defining initial performance standards
o It will be a tool to measure the success of the vendor

4. Performance Measurement
Financial
Budget
Year over Year Improvement
Responsiveness
Time to respond
Time to resolve
Escalations
Technology
New tool utilization, Best of Breed
Impact on functionality
Process
Productivity Improvement
Full compliancy
BCP
Employees
Attrition
Talent Development
Training
Organization Customer Satisfaction
Win – Wins
Service Credits,
Gain Sharing
What’s in your SLA?
Overlooked?

5. o You evaluate and measure the vendors
performance through attainment of
SLAs.
o You receive your expected services and
deliverables through the SLAs.
o You manage change in expectations
through improved SLAs.
Underutilized?

6. o The facility manager must spell out specific SLAs, the
expectations for the vendor; the technicians skills,
certifications, and qualifications being supplied by the vendor
and their companies; and the metrics that will be used to
measure the performance of the technicians and the companies
o For Maintenance a needs assessment must be the starting point
to agree on the necessary SLAs.
o SLAs can be utilized to bring in skilled and trained maintenance
personnel on a mobile basis providing substantial savings.
o SLAs must ensure the quality and training of the supplemental
workforce as well as the infrastructure and tool set need for the
delivery of the services

7. o Example SLAs
o Perform 100% of PM work at critical facilities
o 95% completion of scheduled PM requests each month
o No PM deferred more than one month.
o Emergency response within 15 minutes
o Determine within the first 30 minutes of a response whether
or not on-site critical facility staff can make repairs. If not,
follow escalation procedures immediately
o Notification to 95% of customers and announce scheduled
maintenance or repair events as needed
o Customer satisfaction scores 95% in the top two boxes

8. Reality
Expectation
Expectation
Expectation
Beyond SLAs – What to do

9. Define Success
 Which metrics are more relevant to your business
 Tangible objective
 Leading Indicators
 End Value or current activity
 Manage end to end
 Process Improvements
 Compete in the future
 Purpose of Metrics
 Recognize trends
 Motivate behaviors
 Prioritize resources
 Allow benchmarking
 Compensation
 Alignment
 Data Driven Communications

10. Scorecards outside of the
SLAs
Area Goal Measurement Description
Education/Talent
Certifications Number of requireed
Project related training
programs
Number of training programs conducted related to
outsourced tasks.
Motivational programs
Number of motivational programs to enhance the
motivational level of employees in a month.
Hours of w eb based Web based optional training
Brainstorming sessions Team Sessions
Promotions Intenral promotions
Total

11. Intended Value - Balanced Measurement
 Tangible
 Financial
 Costs per X
 Net Savings
 Operational
 Speed
 Volume Reduction
 Defect Reduction
 Intangible
 Strategic
 Innovative
 Satisfaction
 Relationship
 Decision Making
 Degree of Alignment
 Communication

12. Governance and Stakeholder Management
Perform Will take responsibility for a significant portion
of the project.
Sponsor Will provide the resources and leadership
necessary for the success of the project.
Oppose Will attempt to block an action.
Allow Will allow the project to proceed but may not
directly support it.
Assist Will help in some way to ensure the success
of the project.
Involvement
Commitment

13. Governance and Stakeholder Management
 Relationship Management
 Service Request and Receipt Verification Management
 Performance Management
 Escalation Management
 Project Management
 Security, Business Continuity, Disaster Recovery Management
 Financial Operations Management
 Asset Management
 Contract Management
 Change Management
 Communications Management

14. Key Capabilities:
o Strategic Thinking
o Deal Making
o Partnership Governing
o Managing Change

15. o Partner with the vendor
o Working together to align goals
o Be flexible and understand changing environments
o Work together to achieve common efficiencies
o Honest direct feedback
o Support the Vendor
o Work together to find the best solutions
o utilizing Experience
o utilizing Knowledge
o utilizing Ability
o Client is an advocate for decisions made on their behalf
o Commit to the relationship
o Expect same level of commitment
o Vendor success is clients success
o Maintain a presence in each others organization
o Constant Communication
o Change Management
o Regular Meetings

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“A good alliance is like a unicorn. Everybody had
heard of them, but few have actually seen them.”
Tom Hooks Motorola