Essay about SLAs In BPO Agreements

SLAs In BPO Agreements

Assistance Level Negotiating

Contract and gratification


MAIN: Nov. 2011

Intellectual Home of the Hub for Outsourcing techniques Research and Education (CORE). May be used with permission of CORE.

Agenda – Service Levels for BPO

Initial Matters

Usage of Weighting Factors

Use of Intensity Levels

Use of the Well-balanced Scorecard

MAIN: Nov. 2011

Service Level Agreements

a couple of

Preliminary Issues for All BPOs

Precisely establish the services to get provided (the

" Services”)

Since not really practical to measure performance for all

Companies, carefully determine which in the Services are

most important to the business and should be

measured (" Tested Services”)

Decide whether Tested Services are

being internally tracked and calculated

If they are, determine whether existing overall performance

levels (" Service Levels”) meet the needs of the

business or perhaps whether they require improvement

In the event so , decide whether level of improvements is usually


If perhaps not, determine what Service Amounts are required to

focus on the business

PRIMARY: Nov. 2011

Service Level Agreements

three or more

Use of the Service Level Agreement (the " SLA”)

Used to doc with company the

Tested Service Amounts required

Use for document with service provider the

amounts payable (the " Service Level Credits”) for

failure to offer the Measured Assistance Levels

Use to permit client to end Master


When significant or on-going failures to obtain Service

Levels (" Assistance Level Failures”)

Will go over further in " End of contract Service Levels”


MAIN: Nov. 2011

Service Level Agreements


Prioritizing Assessed Services

First step is to prioritize the importance in the

Measured Providers

Two frequently employed approaches

A. Weighting Elements (Mathematical)

W. Severity Amounts (Non-Mathematical)

CORE: Nov. 2011

Service Level Agreements


A. -- Using Weighting Factors

Weighting Factors

Depending on importance of percentage of Service (" Service

Element”) being scored

Examples of Weighting Factors could possibly be:

. 50

. 25

. 15

. 12

Failure from the Service Level triggers a payment

from the Weighting Factor against the month-to-month

fees – they are cumulative (as per slide 8)

CORE: Nov. 2011

Services Level Deals


Weighting Factors and Limits on Credits

Customer must negotiate relative weight load (i. e.,

. 50,. twenty-five,. 10) because comparative importance

is critical

Because higher combination Weighting Factors

result in higher Service Level Credits, there may be

almost always a debate on the aggregate in

order intended for service provider to limit Services Level


CORE: Nov. 2011

Assistance Level Deals


Sort of Cumulative Weighting Factors

Tested Service Element



Payroll Administration System

. 50

HR Operations System

. 25

Staffing Government System

. 25

Training Program

. 10

Exterior Job Submitting System

. twenty-five

External Candidate RГ©sumГ© System

. 25

Prospect Screening System

. 10


CORE: November. 2011

Assistance Level Agreements

1 . seventy


The " At-Risk Amount”

Employing Weighting Elements also takes a " cap”

on sums payable to determine Service Level


This liability cap is sometimes called the " AtRisk Amount” Percentages fluctuate between companies

Large benefit transactions – (over $250M), range

is usually between 8% and 12% of regular monthly fees

Lower the value, bigger the hat should be to be able

to make repayment meaningful (painful)

CORE: Nov. 2011

Services Level Contracts


Restrictions using Weighting Factors

Service Level Credit rating = A x M where:

A = the sum of all Weighting Factors for all Support

Levels not really met within a month not to exceed the Weighting

Aspect Limit; and

B = the At-Risk Amount in a month (8% - 12% from

previous slide)

PRIMARY: Nov. 2011

Service Level Agreements


Example one particular


The charges for the skills are $1M per month

The At-Risk Sum is 10%...