What are the most effective service level improvements to negotiate with vendors?

1 Know your priorities

Before you enter any SLA negotiation, you need to have a clear understanding of your own priorities and objectives. What are the most important aspects of the service that you need from your vendor? How do they affect your business performance, customer satisfaction, and risk management? How do you measure and monitor these aspects? You should also know your budget, your alternatives, and your best and worst-case scenarios. By knowing your priorities, you can focus on the service level improvements that matter the most to you, and avoid wasting time and resources on less relevant or less feasible ones.

2 Do your research

Another essential step before negotiating SLAs is to do your research on the vendor and the market. You should know the vendor's capabilities, reputation, strengths, and weaknesses, as well as their current and past performance. You should also know the industry standards, benchmarks, and best practices for the service that you are buying. This will help you to assess the vendor's offer, compare it with other options, and identify any gaps or opportunities for improvement. You should also research the vendor's motivations, goals, and challenges, so that you can understand their perspective and anticipate their responses.

3 Be specific and realistic

One of the most common pitfalls in SLA negotiation is to be vague or unrealistic about the service level improvements that you want. Vague terms can lead to confusion, disputes, and dissatisfaction, while unrealistic expectations can result in frustration, failure, and litigation. Therefore, you should always be specific and realistic about the service level improvements that you negotiate with vendors. You should use clear, measurable, and verifiable indicators and metrics to define the service level improvements, such as availability, reliability, response time, throughput, accuracy, security, compliance, etc. You should also ensure that the service level improvements are achievable, reasonable, and fair, considering the vendor's capabilities, resources, and costs.

4 Communicate and collaborate

SLA negotiation is not a one-way or adversarial process. It is a two-way and collaborative process that requires effective communication and cooperation between both parties. You should communicate your needs, expectations, and priorities clearly and respectfully to the vendor, and listen to their feedback, concerns, and suggestions. You should also collaborate with the vendor to find mutually beneficial solutions, trade-offs, and incentives that can help both of you achieve your goals and improve your relationship. You should avoid being rigid, aggressive, or defensive, and instead be flexible, constructive, and respectful.

5 Review and revise

Finally, SLA negotiation is not a one-time or static event. It is a dynamic and ongoing process that requires regular review and revision. You should monitor and evaluate the vendor's performance and compliance with the SLA, and provide them with feedback, recognition, and support. You should also review and revise the SLA periodically, or whenever there are significant changes in your business needs, the vendor's capabilities, or the market conditions. You should use data, evidence, and best practices to inform your review and revision, and involve the vendor in the process. You should also document and communicate any changes or updates to the SLA clearly and promptly.