Building A "Starter Set" Of SLAs For Managed Application Outsourcing Relationships

Many application outsourcing services customers are anxious to achieve greater value beyond labor arbitrage. One approach that an increasing number of firms are exploring involves restructuring application outsourcing relationships to deliver defined outcomes. The resulting so-called "managed outcome" relationships may focus on any number of different predefined objectives and outputs. For maintenance engagements, the predictable, continuous nature of the work, together with the clear boundaries of the tasks involved, lend themselves readily to a transition to a service-level-agreement (SLA)-governed managed outcome relationship. This approach is also relevant to project-based delivery, particularly for new development. This document discusses some of the principal SLA alternatives for those customers that are seeking to transition to a managed outcome relationship.