BATNA Checklist for SLA & Service Credits

Quick Answer

Understanding your Best Alternative to a Negotiated Agreement (BATNA) is crucial when negotiating Service Level Agreements (SLAs) and service credits. This checklist will guide you through assessing your BATNA to make informed decisions and improve negotiation outcomes.

What is BATNA?

BATNA, or Best Alternative to a Negotiated Agreement, represents the most advantageous alternative course of action you can take if negotiations fail. In the context of SLAs and service credits, knowing your BATNA helps ensure you don’t accept unfavorable terms or conditions during negotiations.

Why BATNA Matters in SLA Negotiations

1. Leverage: A strong BATNA gives you negotiating power, allowing you to walk away from bad deals.
2. Confidence: Knowing your alternatives can boost your confidence during discussions, helping you to assert your needs effectively.
3. Preparedness: Understanding your options allows you to negotiate from a position of strength rather than desperation.

Checklist: Preparing Your BATNA for SLA & Service Credits Negotiation

Here’s a practical checklist to help you prepare your BATNA when negotiating SLAs and service credits:

1. Identify Your Needs

• Define Key Objectives: List your top priorities (e.g., uptime guarantees, response times).
• Assess Minimum Acceptable Terms: Determine the lowest acceptable terms you can agree to without jeopardizing your operations.

2. Evaluate Alternatives

• Research Competitors: Identify other service providers and their offerings. How do they compare to your current provider?
• Consider Internal Options: Can your organization manage the service in-house? What resources would that require?

3. Analyze Your Current Agreement

• Review Existing SLAs: What are the current service levels? Are there penalties for non-compliance?
• Understand Service Credits: How are service credits calculated? What triggers them?

4. Establish Your BATNA

• List Alternatives: Write down your best alternatives if negotiations fail (e.g., switching providers, increasing in-house capabilities).
• Assess Feasibility: For each alternative, evaluate the feasibility and potential impact on your business.

5. Develop Your Strategy

• Set Clear Goals for Negotiation: What do you aim to achieve in your negotiation?
• Prepare Concessions: Identify areas where you can compromise without losing sight of your objectives.

6. Role-Play Scenarios

• Conduct Mock Negotiations: Practice with team members to simulate different negotiation outcomes and refine your approach.

7. Document Everything

• Keep Records: Document your analysis, alternatives, and negotiation strategies for future reference.

Concrete Negotiation Scenario

Imagine you're negotiating an SLA with your current IT service provider. Your goal is to secure a 99.9% uptime guarantee, with service credits amounting to $500 for every hour of downtime. Your current provider offers a 98% uptime guarantee with no service credits.

Your BATNA: After researching, you find another provider offering 99.5% uptime and $800 service credits for each hour of downtime. Your analysis shows that switching will cost you $2,000 in transition expenses but offers better long-term reliability.

Negotiation Goal: You enter negotiations aiming to either improve your current provider's offer or prepare to switch to the alternative provider if necessary.

AI Prompts to Practice

Learn more about our AI negotiation co-pilot.