Confused about Service Level Agreement? Not sure how to handle the challenges that come with SLAs? Here is a detailed guideline to craftily face and solve the challenges in SLA Management.
A Service Level Agreement or SLA ensures a mutual agreement between two parties in a contracted term of service. This legal document is an agreement between a vendor and a client on the quality of service and expectations of both parties. When one party doesn’t meet the required service as stated in the agreement, the SLA comes into play. SLAs can include charging the defaulter party monetary penalties and even giving the clients the liberty to come out of the contract to get better service from another service provider.
However, some organisations use SLAs as mere weapons to defend their stand or challenge the service provider or the customer. While an SLA should inculcate an ideal partnership between the IT company and the consumer, often, the agreement comes with unwanted challenges.
An ideal SLA is constructed with Key Performance Indicators or KPI and Metrics. In the absence of an appropriate KPI, a service can be disrupted and create mistrusts. An ideal KPI clarifies all necessary key points on the expectations and ideas of both the IT service provider and the client.
Following are some important requirements to manage a service:
- Service metrics to ensure the quality of assistance or experience of the user. This section provides information about the benefits provided by the vendor. For example: When you get service from an internet service provider, they ensure the internet availability and other additional services that come with it. This section includes the terms and conditions of all services provided, terms of availability, time-specific standards and tariffs
- Process metrics notify the service provider and consumer about the goals achieved and if the resources have been efficiently used within the delivery of service
- Technology metrics alert the service provider about technical issues and opportunities to solve them
- The measurement metrics quantify the commitments of the service. This section is dedicated to the measurement of performance, methods of measurement, frequency and reporting details
- The interval section denotes the timeline of the agreements and the intervals when the agreement is renegotiated
- The obligation section highlights the enforceable obligations to be fulfilled by both the service provider and the client during the duration of the agreement
- The penalty sections clarify the consequences upon violation of terms and conditions. This section enables the customer with the right to receive penalty fees if agreed upon services are not received.
The Challenges of SLAs
Although chalking out an SLA might seem an easy feat, there are certain challenges that may strike major challenges.
1. Changing SLAs are Difficult
To measure their overall performance against SLA, company managers often need to extract raw data, build reports, excel formulas, and pen down custom questions. Since SLAs need to be custom coded into various service desks, it might take a significant amount of time to put effort into changing SLAs.
2. SLAs Do Not Necessarily Align with the Priorities of Business
Since businesses develop quite often, SLAs do not change accordingly. SLA of a particular business can be age-old or inherited. If an SLA was set decades ago, the custom is to maintain the same to honour it. Therefore, it might not serve the needs and priorities of today’s business leading to unnecessary hazards.
3. No Flexibility in Submitting Reports
SLA attainment can be influenced by various unique circumstances. However, most reports of SLA do not include or highlight the reason for not being able to meet the promises that the service provider made. This loophole keeps ambiguity in determining the performance reports and disrupts continuous improvement.
Managing the Challenges of SLAs
Given the situation, to manage SLAs, one must know the types of SLAs they need to manage.
1. Client-based SLA
This agreement is between a client or a group of multiple customers offering necessary services that might serve a group. You can choose the finance section of a renowned company to look after the payroll systems, the purchase systems, the finance systems, the billing systems, etc.
2. Service-based SLA
This kind of SLA is very popular amongst customers, where the service provider offers a singular standard agreement for every customer. For example, one billing system for every company or client.
Mostly the perceptions and needs of the customer are influenced by several factors such as:
- Service accreditation signifies the value
- Present or past experience of the same attribution
- Relative funding of peers in competitive positions
- Clients’ social image in the business market.
However, clients or customers prefer the quality of service over the visibility of the KPI used to manage the service. Therefore, one doesn’t need to include components and process KPI in the Service Level Agreement. They can be stated in Operational Agreements and Contracts underpinning the SLA. Inclusion of major challenges in a particular month and Approach towards handling those and improvements should also be considered.
One must not forget the scope of major challenges and needed actions to solve the problem while providing quality services. We need to consider the number of users at any given aspect and how it might affect the service before including it in terms of an SLA. The quality of work, the procedure, source, the strategy of data collection, process, reporting and analytical measures should be well-versed in the agreement.
How to Take Advantage of SLAs?
To maintain a healthy relationship between service providers and customers, it is smart and sustainable to have SLAs. The benefits are numerous.
1. Sets Guidelines
SLA ensures that both parties agree upon the same standard of services. Documenting a service-provided agreement is beneficial to both parties since they know what to expect and deliver. These measurable guidelines ensure satisfaction, thus any chances of unavoidable disputes. An SLA also ensures that the vendor faces the consequences of failing to meet the obligations. If the expected performance standards are not met, penalties have to be paid to the customers. This alerts the service provider of the losses incurred while protecting both parties’ interests.
2. Peace of Mind
The clients can refer to the contract while holding the vendor accountable for service disputes. The client is ensured about the necessary services to be obtained. They can get monetary compensation if the quality of service is not received, which gives them peace of mind. The SLA encourages many companies to begin a partnership without having any prior knowledge about the service providers.
3. SLA Encourages New Business Opportunities
Clients have the liberty to leave a contract if their needs are not met. Prospective consumers can opt for new professional partnerships if they feel that the previous service provider gave poor service and wasn’t attentive enough. They will be able to find a quality service provider who will take care of their needs. By addressing the loopholes in SLAs, service companies can address the concerns of potential customers and ensure premium service.
Conclusion
Having an SLA is definitely beneficial if one party knows how to efficiently manage the SLA’s challenges. Understanding clients’ needs and producing high-level service for valuable customers will create valuable business relationships. But before drafting an SLA, always consider how often you can measure the management KPI and consider objectives and subjective metrics. Unless you can monitor and measure these, you should not include those on SLAs. Get your ideal service level agreement today at Vakilsearch.
FAQs
What are the challenges in SLA?
Challenges in SLA include defining clear metrics, aligning expectations, and adapting to evolving business needs. Ensuring meaningful KPIs, effective communication, and flexibility are key to overcoming challenges and maintaining a dynamic Service Level Agreement.
What are the SLAs of problem management?
SLAs in problem management typically involve incident response times, resolution targets, and communication protocols. These agreements aim to enhance issue resolution efficiency, minimise downtime, and ensure transparent communication throughout the problem resolution process.
What are the disadvantages of service level agreement?
Disadvantages of Service Level Agreements may include ambiguity in metrics, unrealistic expectations, and difficulties in enforcement. Overcoming these challenges requires meticulous drafting, regular review, and open communication to align all stakeholders on achievable service expectations.
What are the factors affecting service level agreement?
Factors affecting Service Level Agreements encompass technology changes, evolving business requirements, and external factors like market dynamics. Adapting SLAs to these influences requires ongoing evaluation, communication, and flexibility to ensure the agreement remains relevant and effective in meeting business goals.
How can I improve my service-level agreement?
Improving Service Level Agreements involves regular assessment, stakeholder feedback, and continuous refinement. Ensure clear, measurable metrics, align expectations with organisational goals, and foster open communication channels. Regularly review and update SLAs to accommodate changing business dynamics, ensuring ongoing relevance and effectiveness.
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