Service Level Agreement (SLA) Details 2022

What is an SLA?


This is a documented contract between the service provider and customer considering the level of services that were originally agreed upon. It even contains clauses or penalties if the decided obligations are not fulfilled on time or if quality is compromised. This agreement does not follow a very rigid pattern and can vary amongst vendors, services and industries. The Service Level Agreement lays out the metrics for the services that need to be measured. The SLA can be between a company and external supplier or it can even be between the different departments within the same company. When subscribing to an IT service make sure the Service Level Agreement is carefully evaluate and design. This is for the maximum service availability from an end user and business perspective. This commitment includes particular acts of service such as quality, availability and responsibility between the service provider and user. 


Benefits of an SLA


This is an important part of an IT vendor contract. You will get the information on all contracted services and their agreed upon expected reliability into a single document.  


  • Improves the customer service

The cycle times (time to resolve cases) dramatically decrease. This is because the Service Level Agreement clearly states the metrics, responsibilities or expectations so that when issues arise no party can plead ignorance. Hence both the parties will be on the same page regarding the understanding of the agreement. 


  • Better communication

The service provider sets the customer expectation in two ways. Firstly they can refer to the SLA document for definitions on how priorities are set. Secondly it includes  the maximum time that the service provider has to resolve the case. It even refers to the periodic performance reports to inform customers how the support organization is even performing. The average time to resolve is usually less than the maximum time goal. 


  • Mutual agreement

The customers and service providers have jointly created the SLA through negotiations hence all the customers will more easily accept it. So when there are any disagreements or queries the SLA should be use as a written reference. 

  • Defines procedures

These are follow by both the service providers and customers. Any significant contract without an associated SLA (reviewed by legal counsel) is open to either intentional or unintentional misinterpretation. The SLA will protect both the parties in the agreement. SLAs should be align to the technology or business objectives of the engagement. Misalignment can have a negative impact on deal pricing, quality of service delivery, and customer experience.


  • Sets the standards for customer service

This powerful tool confirms to the customer the way the service provider is going to provide support. It also states what the customer must do to receive the support. The provider is ready to measure the service so the customer has a report on the performance. 


What is an SLO?


Service-Level Objective is an agreement within an SLA about a specific metric such as the uptime or response time. The SLA can be consider as a formal agreement between clients and providers. On the other hand, the SLO can be an individual promise that you are making to that customer. Although SLAs are only relevant in case of paying customers, the SLOs are useful for both the paid and unpaid accounts. This even applies to the internal and external customers.

The internal systems include CRMs, client data repositories and intranet which are equally important as the external systems. SLOs liked better than SLAs but they too can be problematic if they are too vague, overly complicated or impossible to measure. They must be simply and clearly crafted. Only the most important metrics must qualify for the SLO status. The objectives need to be in plain language and must always account for client-side delay issues. This means not every metric is essential for client success. 


Challenges faced by an SLA


The SLAs are difficult to measure, report on and meet. However, the agreement role of many SLAs can be lost in many organizations when SLAs are using as weapons to defend or challenge customers and providers. There must be a true partnership between the IT service provider and the customer. This enables a collaborative approach for quality improvement. Metrics and Key Performance Indicators (KPIs) are the core elements of an SLA. The ineffective or absent KPIs can fall into disrepute and ruin the image of the organization that has set up the SLA.

The service metrics must reflect the end-to-end quality of service or user-experience. The process metrics must inform the service provider and customer regarding using resources to achieve goals within the service delivery function. Technology metrics inform the IT provider at the component level. This allows identification of issues and opens opportunities for improvement. Nothing should be include in an SLA unless it is effectively monitore and measured at commonly agreed points.  

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