Patent ID: 8073730

Claim:
A method for modeling a financial risk in a service level agreement (SLA) between a service provider and a customer for the service provider to provide one or more services to the customer, the method comprising: forecasting, by a processor, a service performance of the service provider for at least one performance metric of the SLA, wherein the forecasting comprises computing one or more performance failures in the forecasted service performance for the at least one SLA performance metric based on a plurality of performance targets, and a first one of the plurality of performance targets indicates a minimum service level (MSL) to be achieved by the service provider, and a second one of the plurality of performance targets indicates a higher service level to be achieved by the service provider to obtain an earn-back credit in an event the MSL is not achieved by the service provider; modeling at least one scenario for the SLA based on one or more negotiated terms between the service provider and the customer as found in the SLA; and applying the forecasted service performance of the service provider against the at least one modeled SLA scenario to calculate a financial risk of the service provider with regard to the at least one modeled SLA scenario.