Johannesburg, 28 May 2008
The Consumer Protection Bill and its potential impact on the ICT sector elevates the role of service level agreements (SLAs) in future trade.
The Bill governs all aspects of consumer relations and legally introduces the concept of `strict liability`. This will certainly influence the way information and communication technology products/goods are sold and distributed.
Key aspects such as warranties and guarantees are also covered by the legislation.
On the one hand, the Bill has been lauded as a positive step towards offering protection of fundamental consumer rights. On the other hand, there is concern that it may also lead to increase in pricing as traders take the necessary steps to manage liability issues.
This is because Section 68 of the Bill makes traders (such as manufacturers, suppliers and distributors) directly liable for damage caused by malfunction - in the words of the legislation: "any producer or importer, distributor or supplier of any goods is strictly liable for any damage, caused wholly or partly as a consequence of supplying any unsafe goods; product failure, defect or hazard in any goods; or as a result of inadequate instructions or warnings provided to the consumer pertaining to any hazard."
Against this backdrop it is to be expected that those suppliers operating within the ICT sector and their respective clients that are currently not bound to SLAs, will begin to review their position.
The reason for this is because the SLA prescribes the conditions of service and is designed to ensure that all parties are privy to - and agree upon the terms and conditions of trade/service provision.
The agreement attaches the onus of responsibility for the good working order of the product to the solution provider/ manufacturer or supplier.
As a direct result of the Bill, in practice, a company that procures technology hardware or solutions can use an SLA in place as recourse in the event of malfunction.
This also adds further advantage to hardware and software to be traded as a service and not standalone products separate from any service level structure or format.
This trend and new development opens up the market substantially and will afford those with resources, experience and knowledge to offer proactive hard- and software as a service will capture market share and secure profit quickly.
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