You’re excited to be working with a terrific new vendor. Let's go through the process.
You’ve done your due diligence, written a thorough risk assessment, gotten it approved by your risk committee and you’ve even executed the contract.
You and your vendor start off great
Things start off great – the vendor is doing exactly what they said they were going to do. Perhaps it’s producing statements on your behalf or answering customer service calls. So, you relax and move on to other priorities.
Then, it turns bad
A few months later, you hear from one of your largest account holders. He’s tried repeatedly to get through to customer service and when he finally did they sent him the wrong information.
What went wrong? You thought they were supposed to be providing reports, you could swear you remembered discussing it when you first got started. You pull up the contract and, lo and behold, there was never any written agreement to provide reports. And as you’d moved on to other priorities, you never thought to follow up to see how they were doing.
That's when SLA's come in
Service level agreements (SLA's) are incredibly important because they are especially helpful in times like these. They are requirements you include in the contract.
For example, they shouldn’t be a “check the box” exercise; they should be robust stipulations for the vendor to report to you regularly on their activities.
An SLA can be very straightforward or very complex. Generally, the person at the vendor negotiating the contract is not the same person who will be providing you the regular reporting to prove out their performance.
Here are some things you should do:
- Be sure to review particularly the early items you receive from the vendor to make sure you are receiving precisely the information you requested.
- Keeping your eye on SLA's and ensuring you’re continuing to receive appropriate deliverables are essential steps.
- Avoid just receiving and filing the report, take a couple of moments and make sure the vendor is, in fact, performing as expected.
An SLA can seem perfunctory but it also provides you the best early warning if things start to go wrong.