ARTICLES : THE SLA ROADMAP

We are often engaged by clients to help them navigate through developing the SLA and follow-on monitoring process. The following provides insight into the discipline and implementation approach Crescendo uses for developing Service Level Agreements and enabling clients to sustain and nurture the client – service provider relationship.Developing baseline Service Standards is critical for confirming the operational aspects of the transaction. This includes identifying critical operational hand-offs within delivery functions (e.g., operations), IT/business processes and supporting infrastructure. This due diligence phase provides a foundation for developing the SLA. Any issues identified from a contract perspective are escalated at this time. It is to the Parties’ benefit that this phase is transparent and all details are ultimately exchanged in good faith. Previous experience has shown that failure to execute this phase with transparency leads to a breakdown in the financial and contractual aspects of the arrangement. This results in a delayed Change of Control / Transition of Services in the short-term and a trust issue in the long-term.

The SLA describes functions that are expected to be in and out-of-scope. It establishes performance metrics for those functions that are currently being measured. It also provides a framework for establishing a “transition period” to gather data for those functions that have incomplete metrics or that have not been measured to date. The SLA also establishes guidelines for managing the outsourcing relationship going forward, parameters for problem resolution including remedies / service credits, as well as the establishment of a cross-firm Joint Services Committee / Oversight Group(s) to monitor quality and performance of services on a periodic basis. In summary, the SLA is the “operational” document that will manage the relationship in the future.

Crescendo has advised clients to institute the “transition period concept” – sometimes referred to as the Initial Transition Period for Services – for three to six months post-Change of Control. The purpose is for stabilizing the new operating environment, gathering data history as noted above and ensuring initial metrics set as part of the initial phase are appropriate. During this time, the Joint Services Committee / Oversight Group(s) takes shape and meets on at least a monthly basis to monitor services and make adjustments as necessary.

When engaged by clients, Crescendo advises and manages workflow to create, manage, coordinate and complete the Service Standards and resulting SLA. The collective goal for all parties is to develop a SLA that:

• Describes key functions and responsibilities to be performed by all parties (i.e., in-scope, out-of-scope, operations, IT, fees, etc.) including required hand-offs
• Establishes performance standards that are to be met or exceeded by both parties
• Clearly defines an event that would be considered a “material failure” (i.e., one-time or cumulative)
• Depicts parameters for problem resolution in cases of errors or disputes (i.e., general liability issues where compensation may be required)
• Creates a “transition period” to capture performance data for functions that are not currently measured
• Establishes a Joint Steering Committee / Oversight Group(s) to review quality and Service Level measures and develop solutions to related issues
• Defines reporting standards to monitor progress

Is flexible and adaptable to business change (e.g., scalability, etc.)