SLAs are vital to the computer industry, providing legal cover in areas such as facilities management, software maintenance and managed data networks. However, companies often draw up these agreements without taking legal advice because so few lawyers have a working knowledge of the computer industry.
An SLA should be a self-enforcing agreement in an ongoing relationship. If it is properly drawn up there should be no need for either side to litigate, and any alterations should be dealt with through a change control procedure. In some ways, the process of creating an SLA is as important as the agreement itself.
What should Service Level Agreements cover?
* Quality standards setting out host/terminal response times, batch processing times and ?up-time?/processor availability.
* The consequences of failing to meet procedures or standards.
* Procedures for monitoring performance.
* Procedures for change control (i.e. contingencies for changing part of what is being provided under the SLA).
* Security of site/premises data and access.
* Disaster recovery planning (after a system failure or other catastrophe).
* Agreed frequency of properly minuted meetings, along with agreed action plans.
What form should Service Level Agreements take?
* At their weakest, SLAs are simply oral understandings which have been documented by an exchange of letters.
* At best, SLAs should be a formal, legal agreement with all the technical procedures and specifications cross- referenced and presented as separate schedules.
What happens if the terms of a Service Level Agreement are broken?
* If the breach is fundamental, the innocent party should be able to terminate the SLA and sue for losses.
* Where the breach is not fundamental, there should be a system for measuring the extent of the infringement and apportioning cost. These systems range from an event-based system (if? then?) to a more sophisticated points-based system (if there are more than five examples of? then? will happen). The effects of these systems vary from simply drawing attention to a problem to full compensation for loss.
* The right to withhold payment is a valuable weapon. Holding back or slowing down payments to a supplier?s account has often proved an effective way of applying pressure and achieving results.
* Escalation clauses should be more widely used. These stipulate that, where there is a dispute, it should systematically be taken to an increasingly senior level of management on both sides until the matter is resolved.
Even the best SLAs do not last forever, and there must be a procedure for orderly termination and migration to another system. The failure to include such clauses was a common weakness of early SLAs.
Migration is particularly important to facilities management contracts, where one year is considered the rule-of-thumb timescale. As part of the termination clause, a supplier should be required to provide all reasonable assistance with the migration.
All legal information is provided by specialist computer lawyer Jeremy Holt at law group Clark Holt Solicitors on 01793 617444, or email: [email protected]
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