How do Clients Implement Data Center SLAs with Vendors?

What are SLAs?

SLAs or service level agreements are type of contract that define the responsibilities of client and vendor in terms of performance, support and payment terms.

?Why is the need of SLAs?

SLAs are important for ensuring high availability and minimizing risks if a client doesn’t have an in-house technical team. Clients either have an in-house team to manage the data center or hire third party vendor for maintenance of a specific service i.e., data center UPS, Cooling Units, Generators, FSS etc. It is client’s choice to hire either a single vendor or different vendors for different services.

How to assess if client needs SLA?

Clients need to assess their own needs. Following are the few questions which may help clients decide if they need an SLA: -

a.???Does the in-house team capable to handle day to day routine operations?

b.???Does the in-house team have expertise in handling emergency situations?

c.????Does the in-house team have prior experience of managing data center equipment?

d.???Does the in-house team able to carry out preventive, corrective and predictive maintenances?

Clients are the ones who decide if they need an SLA to maintain data center facilities.

?Outlining Needs and Goals

Once a client decides to have an SLA with a vendor for data center maintenance, the client needs to assess his goals. Goals are the services client needs from vendor. Following are the few type of services: -

a.???Maintenance of data center fire suppression system

b.???Maintenance of data center UPS and cooling units

c.????Maintenance of data center generators

d.???Maintenance of data center switchgears

e.???Maintenance of data center earthing and grounding systems

Market Research & Vendor Selection

Once a client has outlined the needs and goals, the client needs to research about market which is very crucial to have an overview of the best vendors providing services in the same domain, to have a generic idea about cost and to have an idea of standards being followed.

?If expert professionals are available with the client, the individual can do all this else the client can also seek expert advice from consultants.

?Vendor Selection

a.???Advertisement. Public sector organizations in Pakistan are bound to advertise in print and electronic media for hiring technical services. All vendors having expertise in the domain may participate in the bidding process. The client may outline all the technical expertise they desire from the vendor in the advertisement including past experience of vendor and details of technical employee in the organization.

b.???Vendor Selection. Client sets the parameters for vendor selection like vendor’s past experience in the same domain, technical professionals working with the vendor, certifications of technical resources, vendor’s team presence in different regions and the prices. Mostly public sector organizations in Pakistan carry out “single stage, two envelopes” bidding in which vendors submit two separate proposals (technical proposal and financial proposal) with the client. In the first instance, client evaluates the technical proposal of all vendors and the financial proposal is retained unopened. Client rejects technical proposals which does not conform to the specified requirement. After evaluation of technical proposals, client opens the financial proposals in presence of all vendors to have a transparency. The financial bids which are technically non-responsive are returned un-opened to the respective vendor/ bidder.

Drafting SLA

After firm selection, the next phase is to negotiate the SLA terms with vendor. Both client and vendor need to ensure that SLA is clear and there is no ambiguity. SLA must be clear and time-bound. Following are the main clauses which are to be added in SLA: -

a.???Scope

b.???Objectives & targets

c.????Mode of communication between client and vendor

d.???Payment Terms

e.???Incentives and penalties

f.?????Disputes and dispute resolution

g.???SLA Validity & termination

The SLA is signed by both client and vendor.

?Letter of Intent (LOI)

After signatures of both client and vendor, the contract comes into force. The client may issue letter of intent to vendor to start extending the services.

SLA Execution/ Implementation

Once SLA is formulated and signed by both parties, the same may be implemented and monitored. ?The clients need the record every single action taken against the SLA like vendor’s visit for resolution of an issue, meetings held between both parties, agenda points and minutes of every meeting. The same needs to communicated between client and vendor. Meetings between client and vendor are very critical, even if there is no issue, there should be monthly or quarterly meetings between client and vendor to discuss the work executed under SLA, the upcoming actions to be taken and the payment terms. Prior meeting, both client and vendor may share their own agenda points to be discussed in the meeting. Minutes of meeting must be signed by both parties and may be part of the record.

Improving SLA

With time, SLA needs to be improved. The data must be gathered during SLA period and feedback about vendor may be taken from all client premises where vendor was engaged. This will help identify the gaps for improvements in the next SLA.

About The Author

Writer is an electrical engineer having experience in data center power infrastructure. Mr. Hussain has spent last decade in data center facility management, data center operations, data center planning, data center construction, procurement and contract management. ?He holds a bachelor of electrical engineering degree from NED UET (https://www.neduet.edu.pk/) and master of engineering management degree from NUST (https://nust.edu.pk/) Pakistan. He is certified data center professional (CDCP) from EXIN, Netherland and certified project management professional (PMP) from PMI, USA.?

#datacenter #sla #servicelevelagreement #datacentermanagement #datacenterinfrastructure