It Takes More Than SLAs to Manage a Successful Outsourcing Relationship

Principal Marc Tanowitz offers analysis regarding the role of SLAs and the need to integrate other success factors to achieve outsourcing success. Sample excerpt: “Many buyers of outsourcing services spend countless hours defining, measuring, analyzing and discussing service level agreement (SLA) performance but fail to achieve the results, satisfaction and improvement expected from outsourcing. In many cases, this is because the buyer doesn't fully understand how to take advantage of all of the performance levers available through the agreement…SLAs provide a mechanism to address deficient performance while maintaining contract integrity. For most buyers, however, it is far more critical to achieve performance expectations, rather than see a reduction in fees that have already been planned and budgeted. With this in mind, it is key to include non‐financial obligations in agreements, which can potentially be more effective than service level credits to drive provider performance.”

Business Finance