Who are you guys?

  • Selecting Outsourcing Vendors

    SPICE is the metholodology I have developed alongside some of the leading minds in the industry to strategise, procurement, implement, manage and improve outsourced operations. SPICE is an acronym for "S" - Strategy, "P" - Procurement "I" - Imlementation, "C" - Control & Innovate and "E" - Exit.  It is the lifecycle for managing outsourcing contracts.  .

  • Rob O'Malley

    I am the founder of call-centres.com with over 23 years of helping organisations to improve the quality of their outsourcing. I was the first person in The UK to gain a Masters Degree specialiaing in outsourcing. I am a published author, a regular speak on contact centres and contributor to publications around the world.

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service level agreements in outsourcing

Service Levels Agreements (commonly known as SLAs) are components of a contract which dictate the minimum standards required for specific elements.  In call centre contracts, these include things such as the average answer time, handle time or based on quality metrics.  One key difference between these and KPIs are the financial penalties which the supplier incurs for failing to meet them.

The use of SLAs in commonplace in outsourcing contracts but the application of them is often poorly executed.  Here are some rules which (perhaps suprisingly) are often not adopted.

1.  SLAs should relates to the components which are the most important.  Simply adding in many many SLAs will not be effective in delivering what you want to.

2.  Ensure that the SLAs are something which the supplier can influence within the contractual management parameters.  It might sound obvious but is one area often overlooked.

3.  The costs associated with the SLAs should be proportionate.  I've seen many examples where the financial punishments for reaching an answer rate were so low that it was financially beneficial to not achieve them.  On the other side, I've seen the financial risk of the SLAs were so high that suppliers would either not bid or factor in the risk with inflated prices.

4.   Always be aware of the potential side effects of SLAs.  A supplier will always focus on delivering the SLAs which in turn may have an impact on something which you consider to be important.  In the same way as you may seek expert legal advice, it may also be worthwhile to consider external professional advice when determining the SLAs.

5.  Don't assume that the current performance is the benchmark against which the SLAs should be based.  It's not unusual to see a significant uplift in performance when choosing a more suitable vendor. 

6.  Lastly, give consideration to what exactly it is that you consider to be important.  For many organisations, the metric of average handle time has been removed as it has a negative effect on their customer performance.  However, when the outsource, they often add this metric back in regardless of the impact on customer satisfaction.