Contract Management
An SLA is a service – level agreement. It forms a part of service contracts where the definition of service is the standard definition (‘The CIOB launches facilities management contract’, 2000).
This includes all the important aspects of service which are quality of services, scope of service, the responsibilities and other important terms that are relevant and agreed upon between the user and the service provider (Heneghan, E. & S., 2004).
A significant feature in a service – level agreement is the agreed upon or contracted time of delivery of the service (Goo, 2008).
For instance, in the case of telecommunication and internet service providers, service–level agreements are usually included in their contracts with the customers so that the level of service is explained in detail and in simple terms for the customers to understand (Heneghan, E. & S., 2004).
Generally the SLAs are required to put together all information related to the contracted services and terms agreed upon in one singled document. These documents also include the metrics, expectations so that in case there are any issues between the parties none of them can claim to be ignorance (Kaehler, n.d.).
The agreement also makes sure that all the parties to the agreements understand the conditions in the same manner. Hence it can be said that an SLA is an agreement that benefits both parties to an agreement. A contract without a Service – Level Agreement usually leads to intentional or unintentional misrepresentation (RITCHIE, 1982).
Some of the most significant features that should necessarily be present in an SLA include firstly, the time services are to be made available, secondly, the number of users that can be served at the same time, thirdly the benchmark of performances so that later, the actual performance can be compared (Yarmolenko & Sakellariou, 2007).
Further the notification schedules are also to be included along with the help desk to deal with different types of problems, usage statistics, and the availability of dial in access (Beaumont, 2006).
There are different types of SLAs that are prevalent based on the services provided. A customer-based SLA is one where the agreement includes the services that are used in individual customer group (Menkus, 2002).
For instance, a SLA between a service provider and a finance department should include the billing system, payroll system, procurement/purchase system, finance system etc.
A service-based SLA normally includes all the services that are provided by the service provider (RITCHIE, 1982).
Further there are multilevel SLAs which are divided into different levels where each level addresses a set of customers in the same service – level agreement (V & Baskaran, 2012).
There are also corporate – level SLAs which mostly covers the generic service level management (Thaker, 2005). It addresses the less volatile issues which are related to each and every customer in the organization. However, these agreements are less frequently required.
Customer–level agreements cover the issues pertaining to the customers, and the service level ones cover the specific services relating to the specific customer group (Heneghan, E. & S., 2004).
To understand a service – level agreement in a better way it is important to understand what the agreement consists of. Firstly the agreement should contain the name of each of the parties to the agreement, the roles and responsibilities of each of the parties (Heneghan, E. & S., 2004).
Then it should contain the scope of services that are required to be provided, the targets relating to time or quality of the services and the performance, the prices and the rates and also the resources required. It should also contain the communication methods and the communication between the service provider and the customers (‘The Monopolies of Contract Management’, 2003).
The format of the agreement may be general or specific depending on the applicability of services. However, in any case, it should contain all the significant specifications of the services (Kaehler, n.d.).
How does an SLA add value to you as a facilities manager on-site
The facilities manager can be considered to be the people who are held responsible for the managing of all the significant services which form the heart business of any organization.
It is their duty to make sure that the particular organization has the most suitable work environment for the people working there (Muller, 1999).
The facilities manager has a very important role to play in service – level agreements. It is basically an inter-disciplinary field which is related to infrastructure, people, organization, administration of schools, shopping complexes, offices, hotels etc. (Sorteberg & Kure, 2005).
As has been already discussed a Service – Level Agreement is beneficial for both parties to the agreement. Hence, the service providers also benefit due to the inclusion of an SLA and consequently, the facilities providers also benefit in the process (‘The Monopolies of Contract Management’, 2003).
For instance is usually stated in the service – provider agreement about the liabilities of the facilities manager. The liability of the facility manager lies only in those places where it has been specifically mentioned about the liabilities and not in any other cases.
For instance, for anything that is beyond the control of the services provider the facilities manager cannot be made liable (Muller, 1999).
A service – level agreement is extremely advantageous for facilities manager in more ways than one (Liu, Tham & Jiang, 2005).
The agreement helps to maintain consistency between the parties so that the effectiveness of the services can be evaluated. It provides a background to record the continuous improvements and assessing customer satisfaction (Liu & Ma, 2005).
It gives an edge to the provider over the ones that do not make use of service – level agreements. Further the presence of service – level agreements make sure that less time is required to resolve conflicts (RITCHIE, 1982).
In brief it can be noted that an SLA improves communication system between the providers and the clients by improving the understanding between them, sharing vital information, providing timely feedback and hence reducing complaints (Larson, 1998).
It also helps to manage expectations by describing the scope of services, provide proper feedback and establish service levels. It strengthens the relationship between the parties to the agreement. It also connects the services and business objectives (Milner & Olsen, 2008).
Critical evaluation and analysis of a contract, which includes a service – level agreement
In order to critically evaluate a specific contract it is essential to first figure out whether the contract includes a service level agreement between the service provider and the customer. The given contract is an agreement between the Top Vending (Pty) Ltd.
and the Lion of Africa Insurance Company (Pty) Ltd. where the insurance company hires a vending machine from the vending company for a certain amount of consideration. The contract includes a service level agreement which forms the sixth point of the standard rental terms.
This ensures that a relevant service level agreement is present in the contract. The contract also contains other relevant rental terms, which are extremely important for the proper enforcement of the contract.
They are relating to the delivery of equipment, risk, ownership, escalation, liabilities, representation, warranties, obligation of the hirer and termination of contract and default terms (Pongpaibool & Kim, 2004).
While evaluating the contract, one thing can be noted that even though there is a proper service level agreement present in the given contract, the service level agreement is not elaborate, and it could have included a number of essential points in order to render even better service from the service rendering company.
This would have ensured a better connection between the service-providing company and the hiring company (Menasce, 2004).
The service level agreement in the given contract only includes those services that needs to given in the case of any complaint received from the hirer. Some of the significant features that could have been included have been mentioned below in the checklist and the evaluation sheet.
Agenda for monthly meetings
Monthly meetings with the parties to the contract should be included as they form a vital part of the contract since such meetings help to communicate with the parties in a better manner and also solve the ongoing problems relating to the services between the parties.
The monthly meetings are generally based on the services or as in this case performance of the equipment in that particular month. Hence the agenda of the monthly meetings would be based on the updated checklists and the evaluation list given above.
Further the time allotted for the monthly meetings will be one hour where representative of each party would be given half hour to speak. The meeting will be held on the last Saturday of every month.
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