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Negotiating a Service Level Agreement. Douglas Westwater with input form Midlothian Council 29 th April 2008 Welcome. Welcome and Introductions. Case Study.
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Negotiating a Service Level Agreement Douglas Westwater with input form Midlothian Council 29th April 2008 Welcome
Case Study You look out of your window onto your back garden. It is a mess and you decide to get a gardener in to sort it so put a small advert in the newsagent. Gary Gardiner phones you and comes to visit at an specified time to sort out how the job will get done to both your satisfactions. What are the key elements that you need to put in place to ensure this relationship works well and the work is completed so you are both happy with the outcome?
Contract • A contract is a legally binding exchange of promises or agreement between parties that the law will enforce. Almost everyone makes contracts every day. Sometimes written contracts are required, such as when buying a house. However, most contracts can be and are made orally, like buying a loaf of bread, or a coffee at a shop. • a contract is an agreement creating and defining the obligations between two or more parties
Service Level Agreement • A contract is not an SLA, but an SLA is a contract. • A Service Level Agreement (SLA) is a service contract where the level of service is formally defined. In practice, the term SLA is used to refer to the contracted delivery time (of the service) or performance
Service Level Agreement • Definition of service to be delivered • Cost • How is service measured, and outcomes analysed and monitored • Problem management (what systems do you have in place) • Customer (ie Midlothian Council) responsibility – SLA is a 2 way process • Warranties and insurances • Termination of contract - why
Full Cost Recovery Project B Core Costs CEO / Admin staff Rent etc Project A Project C
Break Even Point Break Even Point
Case Study Midlothian Council have entered into discussion with you to establish an SLA that will provide afterschool places (3pm – 6pm) 5 days a week for a year to help 50 parents back to work. • What is the unit cost (cost per placement per day) and what is the total cost? • What will you offer to do it for?
Negotiating • Midlothian Council link officer come back to you and, after an amiable chuckle asks your real cost as they have allocated 25% less than you budgeted for to pay for this service. • If it works there may be a chance to scale up in forthcoming years. What do you do?
Negotiation Skills • know your business • Have all the information at your fingertips about your proposal • Plan and prepare • Be friendly but formal • Know the business of the other party (MLC) • Know your top and bottom (relating to service delivery, money, quality etc). What is your walk away point? • Think of implications. Is holding out for full cost recovery worth losing the contract? • Realise that the other party is under pressure to get something and needs you • Equally they can go to another provider • Keep your eye on how to get a win-win • What additional benefits to you can this contract bring – access to other contracts? / a good relationship with local authority?
