The Significance of Service Level Agreements

Extracted from https://supplychain.accentureacademy.com/~Blog/The_Black_Hole_of_Contract_Dev...

For many, the most frustrating part of developing a new contract is getting legal approval on variances to the standard terms and conditions. It is often the longest lead time in any contract development. Even minor changes result in weeks of delay.

Many companies have addressed and solved this issue by the development of a service level agreement (SLA), also called a master purchase agreement (MPA)...

An SLA is the basis of the supplier relationship. It should include all the expected business benefits and value and provide a mechanism on how they can be effectively understood, communicated, measured, incentivized, and improved. Clarifying the roles and responsibilities not only of the initial buyer-seller relationship but also of the operating team on both the buyer’s and the seller’s side becomes critical to allow the SLA to become a working document...