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Just take the premium that you'd be willing to pay and put it in the bank -- the premium would be priced such that the expected payout of the premium would be l
by Johnny555 7y ago
Just take the premium that you'd be willing to pay and put it in the bank -- the premium would be priced such that the expected payout of the premium would be less than or equal to what you'd be paying.
Besides, a provider credit is the least of most company's concerns after an extended outage, it's a small fraction of their remediation costs and loss of customer goodwill.
- michaelt 7y agoJust take the premium that you'd be willing to pay and put it in the bank In my country, when companies are hired to do overnight rail maintenance, they face very stiff fines if they over-run and delay trains the next morning. The fines are large enough that (for example) companies will have a heavy plant mechanic on site who does nothing on the vast majority of jobs - they're just standing by, to mitigate the risk of a breakdown leading to such a fine. Some business analyst with a spreadsheet has worked out the heavy plant breakdown rate, the typical resulting delays, the expected fines, and the cost of having the mechanic on standby... and they've worked out it's a good business decision. The purpose of having an SLA isn't to get yourself money when your provider fails. The purpose is to make costly risk mitigation a rational investment for your suppliers.