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A Guide to IT Contracting by Michael R. Overly, Matthew A. Karlyn

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109
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Service Level Agreements
CHECKLIST
Common Provisions in Terms and Conditions
Root cause analysis
S Identify reasons for failure
S Develop corrective action plan
S Implement preventative corrections
Cost and eciency reviews
Continuous improvements to service levels
Termination for failure to meet service levels
Cooperation
Common Provisions in Service Level Agreements and Attachments
Measurement window
Reporting requirements
Maximum monthly at-risk amount
Performance credits
S Specify amount or percentage
S Total category allocation pools
S Specify parameters, including timing and notice requirements
Presumptive service levels
Exceptions to service levels
Supplier responsibilities
Additions, deletions, and modications to service levels
“Earn-back” of performance credits
Map the form of service levels
S Title
S Measurement window
S Actual service level or expected and minimum service levels
S Calculation for how service level is derived
110  •  A Guide to IT Contracting: Checklists, Tools, and Techniques
OVERVIEW
Service levels are an essential tool in many dierent types of information
technology (IT) contracts to ensure proper performance of the services
and supplier obligations and user satisfaction. Information technology
agreements, whether professional services agreements, soware license
agreements, reseller agreements, cloud computing agreements, or other
types of IT agreements, should contain precise terms with respect to
the obligations of the supplier to perform its obligations consistent with
and, at a minimum, in accordance with the specic service levels that are
articulated throughout the agreement and in a service level exhibit that is
attached to and incorporated into the underlying agreement. It is impor-
tant to note that provisions related to service levels are commonly included
throughout an agreement and also specied in a service level exhibit.
SERVICE LEVEL PROVISIONS COMMONLY
FOUND IN THE TERMS AND CONDITIONS
e following types of service level provisions are commonly found in the
body or terms and conditions of an information technology agreement.
ese types of provisions contain terms specic to service level failures
and improvements over time. Specic details with respect to the service
levels are more commonly detailed in a separate service level exhibit to
the agreement.
ROOT CAUSE ANALYSIS, CORRECTIVE
ACTION PLANS, AND RESOLUTION
In the event that the supplier fails to provide the services in accordance
with the service levels articulated in the service level exhibit, aer a rea-
sonable period of time aer notice, the supplier should be obligated to
perform a root cause analysis to identify the reasons for the failure and
describe the process for developing a corrective action plan and imple-
menting corrections to prevent the failure from occurring in the future.

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