Service Level Agreement Compensation

by admin on April 12, 2021

Stakeholders — Clearly defines and defines the responsibilities of the parties to the agreement. It is therefore stipulated in the contract and is generally referred to as “Service Level Compensation”. From a legal point of view, these are damages at risk of liquidation. Once availability is established, compensation is calculated. Suppliers generally provide progressive compensation based on the unavailability of the service for a given month, for example. B 5% off for every 30 minutes of downtime or such a scheme. Compensation follows availability in terms of calculation and delivery: if availability is measured monthly, compensation is calculated for a given month; if the measurement is done each year, it is also calculated per year, etc. A final point that you should keep in mind with regard to compensation is that most service providers will only need compensation for customers linked to the customer who actively complain and seek redress. If your cloud server is unavailable for the entire month, but you forget to claim your service credits, the service provider won`t give you service credits for those downtimes. While there is a period during which requests can be made, once time has passed, there is also a chance of obtaining compensation for service interruptions.

Assuming a service provider does not meet the required values in a given month. Customers will want to negotiate for the right of termination without liability or other obligations for repeated failures to meet the same service level requirements. Measures should be designed so that bad conduct is not rewarded by both parties. If z.B. a service level is violated because the customer does not provide information on time, the provider should not be penalized. In Action SLAs, a similar sliding scale is applied when the vendor`s performance is below the accepted minimum level. The main columns are the percentage of the level of service and the percentage of service level compensation. Overall, an ALS generally contains a list of objectives, a list of services that must be covered by the agreement, and a definition of the responsibilities of the service provider and clients under ALS.

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