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Outsourcing Contract Negotiations Writing an SLA

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Presentation on theme: "Outsourcing Contract Negotiations Writing an SLA"— Presentation transcript:

1 Outsourcing Contract Negotiations Writing an SLA
John Webster - Director Salt Lake County Fleet Management

2 What can you expect today?
Gain better understanding about public / private partnerships with vendors Learn how to negotiate with vendors and write contracts for services Understand the value of Service Level Agreements Learn how to develop positive relationships with Fleet customers

When you are looking at the characteristics on how to build your organization: First comes INTEGRITY. Second, MOTIVATION. Third, CAPACITY. Fourth, UNDERSTANDING. Fifth, KNOWLEDGE. Last and least, EXPERIENCE.

4 Without INTEGRITY, motivation is dangerous.
Without MOTIVATION, capacity is impotent. Without CAPACITY, understanding is limited. Without UNDERSTANDING, knowledge is meaningless. Without KNOWLEDGE, experience is blind. EXPERIENCE is easy to provide and quickly put to good use by people with all other qualities. Make absolute integrity the compass that guides you in everything you do. And surround yourself only with people of flawless integrity.

5 Let’s Get Started

6 Outsourced Contracts What is outsourcing? Public /Private Partnerships
Contracting with another company or person to do a particular function. Almost every organization outsources in some way. Although outsourcing has been around as long as work specialization has existed; in recent history, companies began employing the outsourcing model to carry out narrow functions.

7 Outsourced Contracts Advantages - Key Points Cost Savings
Quality of services Access to specialized skills Contractual obligation Staffing issues Capacity management

8 Outsourced Contracts Disadvantages - Key Points Social responsibility
Company knowledge Staff turnover

9 Outsourced Contracts What types of service to outsource? Towing
Heavy Truck Tire Service Paint and Body Vehicle Up-Fitting Vehicle Re-Marketing Motor Pool Warehousing

10 Outsourced Contracts What do I need?
Research, Measurements, and Metrics - (Financial) Identify all pros and cons What is the Organizational Impact - (Personnel) Internal External A plan to mitigate or minimize negative impacts

11 Outsourced Contracts Negotiating with the vendor
The research and measurement/metric phase The RFP is where all the negotiations take place The RFP will be where the terms, conditions and final contract come from

12 Don’t Jump Past Opportunity

13 In-Sourcing Contracts
There are opportunities to in-source contracts Salt Lake County Fleet currently manages 5 inter-local agreements

14 Successful Customer – Vendor Relationships
Face-to-face meetings Establishes roles and expectations Communication Wear each others hat Flexibility Set up and meet quarterly Listen Only a collaborative effort will succeed

15 Getting up to Speed with Customer Success

16 Service-Level Agreements
What are Service-Level Agreements (SLA)? Service-level agreement (SLA) is a contract between a service provider and a customer. Specifies, usually in measurable terms, what services the service provider will furnish. Although an SLA is an excellent expectations-management mechanism, it is important to manage your own expectations of what it can realistically accomplish. Unfortunately, some people view an SLA as a complaint- stifling mechanism or a quick fix to a troubled relationship. However, using it for such purposes creates more problems than it solves.

17 Service-Level Agreements
Benefits of Service-Level Agreements Most important benefit, SLA is communications tool: The value of an agreement is not just in the final product - the very process of establishing an SLA helps to open up communications. A conflict-prevention tool: An agreement helps to avoid or alleviate disputes by providing a shared understanding of needs and priorities. If conflicts do occur, they tend to be resolved more readily and with less gnashing of teeth.

18 Service-Level Agreements
Benefits of Service-Level Agreements (cont.) A living document. This is one of its most important benefits. The agreement isn't a dead-end document consigned to the “Forget Forever” file. On a predetermined frequency, the parties to the SLA review the agreement to assess service adequacy and negotiate adjustments. An objective basis for gauging service effectiveness. An SLA ensures that both parties use the same criteria to evaluate service quality.

19 Service-Level Agreements
Effective Service-Level Agreement must have two sets of elements: Service Elements Management Elements

20 Service-Level Agreements
Service Elements: Clarify what services are provided Clarify services not provided (if customers might reasonably assume availability of such services) Clarify conditions of service availability Establish service standards, such as the timeframes in which services will be provided Define the responsibilities of both parties Establish cost vs. service trade-offs Describe escalation procedures

21 Service-Level Agreements
Management Elements: How service effectiveness will be tracked How information about service effectiveness will be reported and addressed How service-related disagreements will be resolved How the parties will review and revise the agreement

22 Service-Level Agreements
Periodic meetings with customers Collaborative effort Follow-up on goals and / or concerns

23 Service-Level Agreements
Process of establishing an SLA: Even with attention to both sets of elements, a successful agreement requires much more than simply plugging the elements into an SLA template. The process of planning, establishing, and implementing an agreement is typically a many- month process of information-gathering, analyzing, documenting, presenting, educating, negotiating, and consensus-building.

24 Service-Level Agreements
When is an agreement NOT an agreement? If customers are not involved and engaged in the process, it is NOT an agreement! The process must involve customers.

25 Contact Information John Webster – Director Salt Lake County Fleet 604 West 6960 South Midvale, UT

26 Finished Q&A

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