SLA Management: SLA are documented contracts between clients and service providers. They detail the required services and the level of services expected.
Overview:
SLA Management – A Service Level Agreement(SLA) is a written obligation. It establishes a defined number of deliverables that the provider of services agrees to provide to the concerned individual/s who avail of the services. These agreements can occur between businesses and customers or between two different types of commercial enterprises. It outlines the details of the services provided and the quality expectations of the same. These contracts are also ideal for industries in the communications and facilities space. They are worded to clearly identify a client’s expectations and how anticipated issues can be resolved before they take place. This written document serves as a legal obligation between the recipient of the services and the provider of the services. There are three types of service-level agreements that perform different functions. The details of these are indicated in the table given below.
Types of Service Level Agreement |
Functions of Service Level Agreement |
| Customer Service Level Agreement | This is established between a vendor and a customer. It details a specific level of service |
| Internal Service Level Agreement | This is established between two or more divisions within the same business or enterprise, e.g., between the marketing and sales divisions |
| Multilevel Service Level Agreement | This is established between the different internal divisions of a business or between a business and its external clientele. |
What Is SLA Management?
SLA management, in broad terms, is the continual process of ensuring that all offered services and processes, including the underlying contracts, are in accordance with the contract’s agreed-upon service level targets. SLA monitoring helps to protect your organisation by ensuring customer satisfaction through the development of help desk tickets, retroactive reporting, and regular customer feedback.
Since effective SLAs will describe the measurement criteria for the agreed-upon services and obligations, proper SLA management involves keeping an eye on those metrics as well.
SLA Management: Key Elements of an SLA
Some of the primary aspects of this agreement include the following:
- Creation of the Agreement – The agreement should be established with mutual agreement of both sides and not one side
- Performance Measurement – Do not extend the time frame for measuring the level of quality of the services. If you extend it across months, you could experience below par services without being able to rectify the same
- A Concise Summary of the Entire Agreement – Details of the services the service provider will provide to the recipient of the services and how will the effectiveness of the services be gauged
- The Complete Objectives of the Said Services that are Provided – The agreement should clearly state whether the service provider’s goal is to, e.g., furnish a business with technologies they lack, enhance the performance, or help reduce expenses
- Details of the Services – The contract should detail the nature of services provided, to whom they will be provided, the location/department, and the time frame. Details about the personnel on each side who will gauge the services which are being rendered
- Specify the Standards of Services – This forms a crucial part of an SLA as the recipients expect optimal services at all times. The provider of services must indicate changes that could impact the services, e.g., large volumes of workload, unforeseen contingencies, or other situations
- Compensation – The agreement should include a compensation clause by which the recipients avail of some ‘service credits’. This is to protect them if the service providers are unable to fulfill the services as per the desired expectations. This will help the service provider to work towards furnishing clients with better and more effective services
- Cancellation Terms and Details – The said recipients must convey the most practical and professionally viable conditions under which they can cancel the agreement. Cancellation is often resorted to when the said objectives are not met as per the expected standards mentioned in the agreement
- Constant and Acute Failure – If the services are disrupted innumerable times within a specific time frame, the recipients of the services can terminate the agreement immediately.
Why Are SLAs Important?
SLAs offer numerous advantages to both customers and service providers.
SLAs are used by MSPs to manage client expectations and to identify conditions in which customers cannot hold them accountable for service interruptions or performance concerns. SLAs are also necessary for creating performance targets and benchmarks that MSPs must meet.
SLAs are often one of the two core contracts that MSPs negotiate with their customers. In addition to the service agreement, many service providers may engage into a master services agreement with their customers, which spells out a general overview of the terms and conditions under which they agree to deliver services.
Customers also benefit from SLAs in a variety of ways, including the ability to describe the performance characteristics of the services they receive, which they can use to compare or generate leverage when evaluating the SLAs of other service providers. The service agreements will also include provisions for seeking resolution for contract breaches through service credits or other kinds of compensation and remediation.
| MSPs – Managed Service Provider |
Benefits of SLAs
SLA Management: The benefits of Services Level Agreements are invaluable. Some of these are given below:
- They help build trust between the provider and the recipient of services
- They help ease the levels of communication and reduce conflicts
- They enable the smooth execution of the expectations detailed in the document
- The advantages of having a documented contract help establish the relationship between the provider and the receiver of the services
- Failure to comply with the expected levels of quality service is clearly laid down in the agreement, which makes it easy for the client/s to seek compensation
- This type of agreement helps to track the services being rendered at regular intervals.
A Service Level Agreement helps to establish effective communication between the provider and the receiver of the said services. It helps service providers to set some practical conditions under which they will support their clients. This helps protect the service providers as they cater to diverse clients with varied expectations. This makes it impossible for the service providers to be able to fulfill wide-ranging requirements. An SLA makes it possible to communicate the priorities, remedial measures, and penalties agreed upon mutually by both sides involved. This agreement determines the metrics, expectations as well as responsibilities in very clear terms, which cannot be countered in case of any future disagreement. These agreements affirm that the provider as well the receiver of the services have clarity on the said requirements. This reduces the scope of any kind of misinterpretation.
SLA Management – All Service Level Agreements are in sync with the objectives of both the parties involved. These agreements entail an indemnity clause as well. The clause clearly outlines the service provider’s responsibilities if a breach of services occurs. The various metrics like the time frame for which the services are available, and the failures in deliverables, e.g., a backup or restoration of services, are outlined to the minutest details. This minimises the chances of misconstruing the responsibilities. Most of these agreements also include a modification clause. This comes into effect if the needs of the said client have increased or decreased, there is an increased demand for advanced technology requirements, or the workload has changed. This modification clause is revised based on these changes. It thus becomes imperative to revise such agreements at regular intervals in the larger interests of both the provider and the client. Such detailing and improvisations facilitate ease of communication between the two parties.
Common Service Level Agreement Metrics
SLA metrics are linked to specific SLA objectives, which is essentially why every metric is crucial. Here are a few examples of popular metrics:
- Abandonment Rate: the percentage of queued calls that clients abandon while waiting for an answer.
- Uptime: system reliability is also known as availability or uptime. This is typically defined by the proportion of time a device has been operational or the percentage of time that given services have been operational and available to the consumer.
- Average Speed of Answer (ASA): the average time it takes the service desk to respond to a call.
- Business Results: the use of key performance indicators to calculate how service providers’ contributions affect business performance.
- Defect Rate: the percentage of deliverables that contain errors. This might range from code problems to missing deadlines.
- First-call Resolution (FCR): the proportion of incoming calls resolved without the need for a help desk callback to complete the case resolution.
- Mean Time to Recovery (MTTR): the amount of time it takes to recover from a service interruption.The amount of antivirus updates or patches installed for security. Even if an incident occurs, MSPs can demonstrate that they took precautions.
- TSF (Time Service Factor): the percentage of queued calls that are answered within a specified time window.
- Turnaround Time (TAT): the time required to resolve a specific task or issue once it is received by the service provider.
What Are the 3 Types of SLAs?
SLAs are roughly classified into three tiers:
- Customer-based SLAs: These agreements are made between service providers and specific customer groups, and they apply to all of the services that the customer group consumes. For example, if a company’s financial department is a customer group, a customer-based SLA would demand the service provider to manage the financial software as well as billing, payroll, and procurement systems.
- Service-based SLAs: These are agreements between service providers and customers that are based on specific services provided by the service provider. This can involve supplying consumers with email systems or performing routine maintenance as part of a service package.
- Multi-level SLA: These agreements are divided into three sub-tiers, each of which applies the same services to various client groups within the same SLA.
Conclusion
Service Level Agreements serve as powerful tools in setting benchmarks for customer services. They signify timely commitment and support within the framework of the agreement. The details of these agreements help the service providers understand the specific requirements of their clients. This sets the foundation for becoming familiar with their client’s business goals, daily needs, and distinct processes. The communication between the two parties is worded in a friendly manner that is easy to understand without escalating unnecessarily. This sets the pace for client satisfaction, enhanced productivity, and cost reduction. SLA Management – These agreements help define the levels of services and the payment terms for the same. The clarity of the various details is agreed upon, and the agreement is signed by both the parties involved. This systematic communication leaves no ambiguity for any side unless there is a severe breach of services or payments.
FAQs
What is a SLA management?
SLA management refers to the process of creating, monitoring, and maintaining Service Level Agreements (SLAs) between a service provider and its customers. It involves defining the agreed-upon service levels, ensuring compliance, and addressing any issues or breaches that may occur.
What are 3 types of SLAs?
The three types of SLAs commonly used are:
✷ Service-based SLA
✷ Customer-based SLA
✷ Multi-level SLA
What are the 5 phases of SLA management?
The five phases of SLA management are typically as follows:
➥ Initiation: This phase involves defining the scope, objectives, and stakeholders of the SLA.
➥ Negotiation: Next, the service provider and the customer negotiate and agree upon the specific terms and conditions of the SLA.
➥ Design and Documentation: In this phase, the SLA is formally documented, including the service levels, metrics, and responsibilities of both parties.
➥ Implementation: The agreed-upon SLA is now put into practice, and the necessary monitoring and reporting mechanisms are established.
➥ Review and Improvement: In this phase regulat reviews of the SLA are conducted, and adjustments or improvements are made based on feedback, performance data, and changing requirements.
Which tool is used for SLA management?
Various tools can be used for SLA management, depending on the organization's preferences and requirements. Some popular tools include ServiceNow, Freshservice, Zendesk, Jira Service Management, and BMC Remedy.
What is SLA and KPI?
While an SLA defines the agreed-upon service levels, a KPI is a metric used to measure the performance and effectiveness of the service provider in meeting those levels.
What is the SLA life cycle?
The SLA life cycle refers to the stages involved in the management of an SLA, from its initiation to termination.
What are the 2 types of SLA in service now?
In Service Now, the two types are standard SLA and operational level agreement.
What are examples of a SLA?
Resolution time SLA for IT incidents, Uptime SLA for a web hosting service and Response time SLA for customer support.
What are the 4 aspects of SLA?
The four aspects of an SLA typically include:
✷ Service Scope: Clearly defining the boundaries and scope of the service to be provided.
✷ Service Level Targets: Specifying the performance targets and measurable metrics associated with the service levels.
✷ Responsibilities: Outlining the roles and responsibilities of both the service provider and the customer
✷ Reporting and Review: Establishing the mechanisms and frequency for monitoring, reporting, and reviewing the service levels and performance
