[Term of the Day]: Underpinning Contracts
Term of the Day
"Underpinning Contracts (UCs)"
Definition — What is an Underpinning Contract?
In an IT support environment, every support group, vendor (or) third party and so on work under a certain time contract based on the priority of a task.
Underpinning Contracts (UCs) are similar to Operation Level Agreements, while OLAs are generally between the support groups within the organization, UCs are agreements negotiated between an IT Service Provider and a third party.
The third-party provides goods or services that support the delivery of an IT service to a customer. Therefore, UCs must be aligned with the customer-facing Service Level Agreements.
Let's assume, you are an IT service provider and you have end-user customers that you provide services to. One of these services may be the internet. You may provide these services yourself or a third party may provide the services to you and you in turn provide it to the end-user customer. An example of an underpinning contract is between you (the IT service provider) and Verizon (the third party vendor) who provides you with the internet services. When an end-user customer needs a new internet connection, they work with you, the IT service provider, and you, in turn, work with the third-party vendor, in this case, Verizon. The relationship between you and the third-party vendor is called an underpinning contract.