A service-level agreement (SLA) defines the level of service you expect from a vendor and lays out the metrics by which service is measured. If the vendor is unable to provide the agreed-on services, which are often essential to maintaining your business operations, the SLA will help you hold them accountable in the form of service credits. This holds true of Workday SLAs.
SLAs are a critical component of any technology provider contract. Every organization has different business requirements which may lead to different SLA requirements. At the same time, the vendor’s business is built on a one-to-many solution with business requirements dictating consistent SLAs across their customer base. However, vendors have shown some flexibility to provide different levels of support on certain occasions. If you’re considering Workday, here is what you should know about Workday’s standard SLAs and what to expect when negotiating SLA modifications or service credits.
You can view Workday’s standard SLA on their website but the most important components are:
1. Service Availability
2. Service Response – Processing time of the Workday Production Tenants.
Workday’s Service Response commitment is:
3. Disaster Recovery
The SLA includes the following disaster recovery (DR) plan for the Workday Production Service:
These items are commonly found in SLAs, but the specific levels of commitment are unique to Workday and listed on Workday’s website, which may be updated from time to time.
While it is possible to negotiate Workday’s SLAs, it is very difficult because Workday is a multi-tenant SaaS application. This means that multiple customers are sharing a single physical instance of the Workday system which separately stores each customer’s application data. It is very difficult for Workday to have different SLAs for their customers since they all reside within the same environment and are all subject to the same maintenance schedules, support operations, etc. Other cloud providers, including SAP and Oracle, have shown a little more flexibility to negotiate SLAs, but Workday is notorious for being unwilling to make concessions.
However, there are limited scenarios where Workday has been willing to increase the 99.7% service availability commitment in their standard SLA, but it typically comes at a cost. If you push for a non-standard SLA with higher levels of service, you can expect Workday to increase its pricing which can add up significantly over multiple terms.
Also, your ability to achieve higher SLAs will largely depend on your ability to make a sound business case. For example, being in an industry that requires your IT environment to comply with International Traffic in Arms Regulations (ITAR) is a good justification to negotiate Workday’s service availability commitment.
If you don’t have a great reason to negotiate your SLA, it might be better to accept Workday’s standard SLA and avoid an increase in costs that you’ll carry with you to future renewals. Many companies want an SLA with “5 nines uptime”, or a system that is fully operational 99.999% of the time, which equates to an average of less than 6 minutes downtime per year. However, this level of uptime often can’t be justified.
We recommend doing a self-assessment of your real SLA requirements to see if it actually makes sense to negotiate. If it does make sense, you’ll have a reasonable number to aim for. Also, don’t forget that cloud providers are already incentivized to keep a high level of service availability. The last thing cloud providers want is to fail to meet their service availability commitment for all of their clients residing in the same environment. Not only will that be a headache to deal with, but it will hurt from a PR standpoint.
Though Workday wants to avoid service failures, they can and do happen. If a service failure occurs, Workday would provide the customer with a refund in the form of a service credit applicable to the next subscription fee invoice. This credit is based on a percentage of its applicable monthly subscription in “compensation” for the affected service.
Typically, if Workday fails to meet their service availability or service response in any rolling six-month period, the customer is entitled to the following credit based on their monthly subscription fees:
In general, Workday has demonstrated more willingness to negotiate changes to their service level credits rather than their SLA commitment levels. Additionally, Workday has been willing to improve service level credits without triggering a price increase. In most cases, we recommend focusing on improving service level credits in lieu of negotiating SLAs so you receive some sort of benefit that provides monetary value in the event of a service failure.
Though Workday may be more flexible when negotiating service credits, keep in mind that it is very challenging to do so without proper justification and negotiation leverage. At UpperEdge, we help clients negotiate competitive deals with Workday. If you are ready to think more strategically about your Workday relationship, contact our expert advisors today.
