Friday, November 01, 2013

SOP Friday: Signing Service Agreements

I've written hundreds of pages on service agreements. In fact, I'm just in the middle of a two-part series that is over at the StorageCraft Blog.

So this post is not about all about WHY you need service agreements or WHAT they need to look like. This post is very simply about a policy THAT you will have service agreements with every single client. As with all policies, it moves from a general principle to a process, procedures, and checklists.


Defining Policy, Process, Procedure, and Checklist

The flow from Policy to Checklist is a flow from the broad to the specific. A policy is a statement of a course of action by the organization. For example, the following are policy statements:

- "We will get prepayment for all hardware and software we sell."

- "Everyone we do work for must have some kind signed agreement for services."

- "All technician labor must be performed against a service ticket."

A Process is the name given to a series of tasks that result in a general outcome. Processes support policies. There must be a process to make sure all clients sign service agreements.

A Procedure is the name given to a specific set of action steps that achieve an outcome. A process might include several different procedures.

A Checklist is the name given to the finest level of detail for executing the action steps needed to achieve a result. A procedure should include at least one checklist, but might include more than one checklist.

Your Policy: Everyone Signs a Service Agreement

As a starting point, let's just adopt the policy stated above: Everyone we do work for must have some kind signed agreement for services. Great.

Now, there are different types of service agreements. The most basic is a 1-2 page "terms of service" agreement. You might also have agreements for basic break/fix, managed services, blocks of time, projects, etc. You might have one agreement flexible enough to be used for all of these.

So, to implement you policy, you first need to have one or more service agreements that people can sign. Then you need a policy that says that everyone should sign. Finally, you need processes and procedures, and even a checklist, to make sure this happens.

See the blog post on Setting Up a New Managed Service Client (Checklist).

All of that happens as soon as the client signs a service agreement. Well, at least when they sign a managed services agreement. When you go through that checklist, I hope you can see that there's a lot of time (and a little money) involved in setting up a new M.S. client. So they better be under contract.

As for simple break/fix and small jobs, you will need a different process. Once you have the policy in place that everyone must have an agreement, you need to figure out how you'll make that happen. As a rule, larger agreements for ongoing service involve some kind of sales process that concludes with a signed agreement.

Smaller require just the 1-2 page "terms of service" agreement. In our company, the owner or service manager general works these jobs so they can meet the client and determine whether we want to pursue an ongoing relationship with them. The owner or service manager simply takes the 1-2 page "terms of service" agreement with him and has the prospect sign it before anything else is done.

If a technician is sent to do the job, the process is basically the same. They carry copies of the 1-2 page "terms of service" agreement and ask the process to sign it. Technicians need to be very clear on this point: No work can be done before that agreement is signed. Period.

This policy is pretty simple and straight forward. You can adopt it in sixty seconds and then simply do it from now on. Implementation simply consists of writing a quick process for writing up each kind of agreement. Assuming an agreement is the end product of a sales call, the only real procedure you need is about the terms of service agreement.

Just do it.

Comments welcome.

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About this Series

SOP Friday - or Standard Operating System Friday - is a series dedicated to helping small computer consulting firms develop the right processes and procedures to create a successful and profitable consulting business.

Find out more about the series, and view the complete "table of contents" for SOP Friday at

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Next week's topic: Getting Started - Cash vs. Accrual Accounting


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