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Service Level Agreement for Quality Standard

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Viewing 8 posts - 1 through 8 (of 8 total)
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  • #24568

    Meg
    Participant

    Hello all –
    Wondering if anyone is working with a service level agreement for quality standards in their business?  I work with an outsourcing organisation and the client is wanting to apply a quality metic to our output (mortgage processing) with all the attendant financial penalities should the SLA be missed.
    Any ideas?  Know of anyone else doing this?
    TIA
    Meg.

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    #58900

    Tierradentro
    Participant

    At one point, I headed the Service Quality function for the largest credit card processor with SLA and contracts for the largest US and European banks. If you want to set up an SLA agreement, the following are prerequisites:
    1. Negotiation team comprising: Operations, Legal, and independent organization such as Service Quality and Sales to negotiate the SLAs and to determine corrective actions taken.
    2. You will need to set up an independent functions such as Service Quality that is independent of the operations and facilitates the communication of monthly results.
    Make sure that the contract does not stipulate that the client can abandon the contract for a series of SLA misses.

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    #58909

    Meg
    Participant

    Thanks John – that’s useful.
    Cheers
    Meg.

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    #58911

    LisaL
    Participant

    Hi Meg,
    We have Service Level Agreements with all our customers and suppliers. I recommend that you agree on a clear definition of start time and finished time using processing time as a % yield.  I also recommend that you include an issue resolution time in addition to the main metric that states when you and your customer are to send replies to inquiries (i.e. 1/2 business day for email requests for information).

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    #58916

    Nitesh
    Participant

    Hi Meg,
    Service level agreements are coming in vogue now – especially in outsourcing.
    My own organization (an outsourcing company) has such agreements with most of our new customers. Typically how these are negotiated is :-
    1. A black belt from our side understands the clients expectations regarding the specific metrics they want us to achieve (productivity, accuracy, TAT, etc). Sometimes the client  needs help with reaching the specific metrics critical to their business – you may have to spend some time on this.
    2. We then ask the client for past performance data on these metrics – care should be taken that there is no change in the method of calculation or environment which could significantly affect the results
    3. We baseline using the past data and arrive at what we think of as achievable – incase past data is not there, we ask for 1-3 months while we measure our performance and gather data
    Finally we negotiate the targets based on the above data.
    Hope that helps.
    Nitesh

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    #58918

    PKT
    Participant

    Meg,
    Adding to what Nitesh has mentioned, one of the common trend, which is increasingly becoming popular, in quality SLA is baselining it to the clients performance. (In case they don’t have similar process/team working onshore, we can baseline with different vendor).
    Eg:
    Assuming that SLA for Quality is 75%
    We can look at adding a clause which says either 75% or within 3% of client quality score (read it as vendor in second case).
    This system ensures that we are safeguarded from the effects of Global X which are not in our control. (for example Collection SLA in a Collection process when there is a natural calamity will definetly go down, we might not meet the SLA but we will be failry judged on target met by clients)
    Another similar system we can negotiate is having a RAG status (stands for Red Amber Green). In this we can set Amber to deal with a little deviation from SLA (say 73% Quality). When we hit Amber, clients usually demand a detailed study and action plan around the miss in SLA. However if it is Red then it is considered as a SLA mis.

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    #58922

    Jake
    Participant

    Meg,
    You should get in touch with the folks at SGS.  They have a number of products which certify SLA’s. Have a look at http://www.sgs.com/qualicert-2?serviceId=13428&lobId=5554 
    Jake
     

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    #58923

    Meg
    Participant

    Thanks all for your suggestions and website resources! 
    Cheers
    Meg.

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