Presentation on theme: "Outsourcing Contract Negotiations Writing an SLA"— Presentation transcript:
1 Outsourcing Contract Negotiations Writing an SLA John Webster - DirectorSalt Lake County Fleet Management
2 What can you expect today? Gain better understanding about public / private partnerships with vendorsLearn how to negotiate with vendors and write contracts for servicesUnderstand the value of Service Level AgreementsLearn how to develop positive relationships with Fleet customers
3 INTEGRITY First comes INTEGRITY. Second, MOTIVATION. Third, CAPACITY. 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.
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 servicesAccess to specialized skillsContractual obligationStaffing issuesCapacity management
8 Outsourced Contracts Disadvantages - Key Points Social responsibility Company knowledgeStaff turnover
9 Outsourced Contracts What types of service to outsource? Towing Heavy Truck Tire ServicePaint and BodyVehicle Up-FittingVehicle Re-MarketingMotor PoolWarehousing
10 Outsourced Contracts What do I need? Research, Measurements, and Metrics - (Financial)Identify all pros and consWhat is the Organizational Impact - (Personnel)InternalExternalA plan to mitigate or minimize negative impacts
11 Outsourced Contracts Negotiating with the vendor The research and measurement/metric phaseThe RFP is where all the negotiations take placeThe RFP will be where the terms, conditions and final contract come from
13 In-Sourcing Contracts There are opportunities to in-source contractsSalt Lake County Fleet currently manages 5 inter-local agreements
14 Successful Customer – Vendor Relationships Face-to-face meetingsEstablishes roles and expectationsCommunicationWear each others hatFlexibilitySet up and meet quarterlyListenOnly a collaborative effort will succeed
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 AgreementsMost 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 ElementsManagement Elements
20 Service-Level Agreements Service Elements:Clarify what services are providedClarify services not provided (if customers might reasonably assume availability of such services)Clarify conditions of service availabilityEstablish service standards, such as the timeframes in which services will be providedDefine the responsibilities of both partiesEstablish cost vs. service trade-offsDescribe escalation procedures
21 Service-Level Agreements Management Elements:How service effectiveness will be trackedHow information about service effectiveness will be reported and addressedHow service-related disagreements will be resolvedHow the parties will review and revise the agreement
22 Service-Level Agreements Periodic meetings with customersCollaborative effortFollow-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 InformationJohn Webster – DirectorSalt Lake County Fleet604 West 6960 SouthMidvale, UT