Final TSA & Costing

Confirm Service Levels

The TSA should provide a description of service performance levels for each of the service elements, as well as specifications for all measures to be adopted for service-level monitoring and the agreed-upon frequency for measurement and reporting activities.

The Service Level should cover:

• Services subject to the SLA
• Metrics (e.g., 99% availability of mission-critical systems)
• Measurement approach

Finalize Service Costs and Payment Terms

A clear definition of all service costs, costing methodologies, and invoicing procedures should be documented in the TSA as follows:

Service costs broken down by service elements.

• Methodology on how the costs are determined
• Unit charges, rate cards, and volume metrics that may be used for cost methodology
• Adjustments (i.e., true-up or true-down) in costs that align with changes in scope
• Payment terms such as frequency of invoicing, incremental costs
• Agree Ownership, Communication and Reporting

Each TSA in-scope service is operationally managed and delivered by a TSA owner from the service provider. The TSA owner is also responsible for providing regular reports on service performance to the receiver. A list of such reports, including audit reports, reporting frequency, and a recipient list, should be clearly articulated in the TSA document. An outline of the procedures to report and escalate problems must also be defined and documented to support the overall governance model during TSA execution.

Define the TSA Governance

The divestiture governance process needs to take into account how the TSA should be governed post-close. The most critical roles required as part of the governance model include:

• Executive Management
• This is the highest level of decision-making authority within the governance model. Executive management handles issue escalation, mitigation, and dispute management.
• TSA Owners
• They define and refine TSA management processes, identify and mitigate TSA delivery risks, and help manage financial commitments and exits. Additionally, the managers work closely with TSA owners to report execution status and escalate issues through the right channels.
• TSA Billing
• This group is responsible for compiling monthly status updates from TSA owners, coordinating with billing teams for invoicing and collections, and tracking and reporting progress toward TSA exits.
• Need-Based Support
• These are specialized teams that support TSA execution on an as-needed basis and include representatives from:

          • Legal: Legal support for interpretation and issue resolution

          • Finance: Support for payments and collections

          • Tax: Advisory support on tax implications

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Finalize Billing Management

Billing for TSA services needs to be set up in advance. The process involves identifying the cost centers that will be used to bill for each service at an appropriate level of aggregation (i.e., local, regional, global). A billing threshold criteria appropriate for the billing frequency (e.g., quarterly billing for more than $5000) should be defined in the TSA invoicing. Timeframes required for filing and resolving billing disputes should also be defined in the TSA invoicing and payment terms.