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IT supplier contracts and service level agreements


When entering a contract with your IT supplier, make sure that the terms and conditions are fair to you both. Once you enter into an agreement, document the terms of your engagement in a written contract.

Be completely clear about what the contract with your supplier includes. Hidden extras can be expensive.

Things to consider before signing an IT service contract

Check if you'll receive:

  • on-site service calls - a certain number may be included or charged at a reduced rate
  • preventative maintenance, eg using anti-virus software and firewalls to protect your system
  • remote monitoring and diagnosis - if included, check if you need any extra equipment or communication links
  • telephone support - check if any limits apply
  • warranties - check what warranties, if any, are included
  • software upgrades - check if upgrades are free, or if you have to pay a subscription or licences for new versions
  • software support - check if you can report problems and receive help, patches and bug fixes
  • user training - a limited amount of training may be included in the system's purchase price, but some suppliers will charge extra
  • manuals - you may need them if you terminate your supplier contract

IT service level agreements (SLAs)

When buying IT services, draw up a service level agreement with the supplier to specify exactly what you expect from them. A typical SLA should cover:

  • scope - details of the hardware and software that is to be covered
  • the range of services - what the supplier will be required to provide
  • service availability - when the service should be available
  • response times - usually the faster the response times, the greater the cost
  • escalation procedures - the ability to intensify the response to problems, eg move from off-site diagnosis to on-site support
  • record-keeping - ways to document problems and solutions, and keep records for dispute resolution
  • performance review - to maintain acceptable levels of service over time
  • supplier obligations - such as providing spare parts, the qualifications of support staff and the need to meet response times
  • customer obligations - your responsibilities, eg informing the supplier about changes that affect the scope of the contract, and the cooperation of staff with the supplier
  • termination of agreement - a formal process that defines how the contract may be terminated

For more tips on agreeing supplier contracts, see how to negotiate supplier contracts.