Contracts Management purpose is to have strategic service providers, delivering consistent performance and Service Level agreement, at the best price and includes the decision for outsourcing, contract definition, mobilization, execution and control, evaluation, based on the type of contract established.
When deciding to use outsourced services the clear definition of the scope and the control is crucial to ensure that the maintenance strategy results expected are effective.
Outsourcing is a company transferring a part of its business processes and functions to a third-party organization located elsewhere, all of which is consummated by a contract.
Outsourcing enables budget flexibility. It allows organizations to pay only for only the services they need and when they need them.
It also reduces the need to hire and train specialized staff, brings in engineering expertise from the outside, and reduces capital expense, yielding better control of operating costs. The outsourcing arrangement can change as your maintenance needs change.
A service level agreement (SLA) is a critical part of any outsourcing contract. SLA defines the boundaries of outsourcing project in terms of the functions and services that the service provider will deliver and identifies the service standards that the service provider must meet. A well-drafted SLA accurately sets expectations for both parties and provides guidance for measuring performance to the defined targets.
If the outsourced function is business critical, it is important to identify additional consequences for failing to achieve the service standards, such as designating the critical functions as key service levels and identifying the termination triggers.
Outsourcing maintenance services have risks, that have to be considered to be mitigated:
To avoid this reality, it is important to have an effective Contract Management process in place.