What is an SLA? A service level agreement (SLA) is the level of service a business expects from a managed service provider. It can be a binding agreement between an organization and a vendor or between two departments.
An SLA outlines various elements such as types of services, requirements, remedies, and penalties if the best goals are not achieved. It helps ensure that there is no compromise from the vendor based on the services offered to an organization.
It is best to create service level agreement best practices to set the right expectations and achieve quality results in the long run that will help the organization meet its goals. Below are the SLA best practices that you will learn from this guide.
- Create Measurable Goals
- Educate Your Team on the Importance of an SLA
- Measure Teams SLA Performance
- Align SLA with Customers’ Needs
- Be Flexible with the SLAs
- Create an Improvement Plan
- Analyze Potential Challenges
- Set Clear Communication Channels
Why is SLA Important?
If you’re asking yourself, why is a service level agreement important, SLAs are a crucial part of a service contract between service providers and vendors that protects your business and helps you achieve your expectations. Below are the benefits of creating SLAs.
1. SLAs Lay a Common Ground
An SLA contains precise information about the responsibilities, deliverables, and expectations of the vendor and the business. This protects the interests of both parties, thus, minimizing conflicts and retaining a long-term relationship. When there are no disputes, your work will flow well, thus, increasing productivity.
2. SLAs Protect Your Time
Some customers may have unrealistic expectations, but you have to do all it takes to satisfy their needs. An SLA helps you set aside time to attend to such customers. The SLA will include specific days and times that you will attend to the customers.
3. SLAs Can Prevent Disputes
With an SLA, you will be able to attend to your customers in time because of the streamlined project management processes. The customer support team will handle customer complaints effectively through a service desk or contact center, thus, making your business reliable and trustworthy. This minimizes disputes and enables you to continue with your operations smoothly.
4. SLAs Establish Boundaries
It is imperative to establish boundaries between the vendor and business responsibilities. This helps both parties to focus on delivering their part without any blame. For instance, if a vendor manages your RMM tools or the entire software and hardware, you should be clear with the responsibilities when creating an SLA.
What Should Be Included In A Service-Level Agreement?
- Goals and objectives – What do you plan to achieve in the long run? This should be part of your service level agreement. Make it detailed, and each item should have a timeline, individuals involved, and clearly outlined responsibilities for the relevant parties.
- Key Performance Indicators (KPI) – It is important to include the key performance indicators in the SLA to help you measure performance seamlessly. The KPIs may consist of performance standards and overall objectives. What you have as KPIs in the SLA depends on your business goals and needs.
- Service Description – A comprehensive service level agreement should also include a detailed service description offered by the vendor to the organization. You can put the services into different categories per department for effective monitoring and performance.
- Penalties to the Vendor – What happens when the vendor doesn’t perform according to the agreed terms? An effective SLA should include penalties that the vendor may face in case of an SLA violation, like financial penalities or issuing service credit. Create an explicit document to keep the vendor informed about your expectations.
- Reporting Frequencies – As a business, you want to get timely reports from a third party to determine your progress. It is best to include the reporting timelines and frequencies showing when the vendor is expected to report for the services offered. Create an effective reporting structure that the vendor will use.
- Risk Management – A business may have potential risks that can affect operations if no measures are taken. The best way to stay ahead of the game is by including risk management measures in the service level agreement. Let each party know who is responsible for any risks that may arise.
- Service Management – A concise SLA should include service availability and service requests. The information could consist of remote assistance options, a response time that a customer should wait for feedback, and telephone support.
Service Level Agreement Best Practices
Below are the top service level agreement best practices that will help you achieve your goals in real-time.
1. Create Measurable Goals
Setting unrealistic goals is one of the main reasons vendors fail to achieve the expectations of their clients. Therefore, it is imperative to review performance metrics and set expectations that the vendor can achieve without compromising the quality of service. Set specific, measurable, achievable, realistic, and timely goals, review customer expectations and market performance to set quantifiable goals.
2. Educate Your Team on the Importance of an SLA
Before you introduce SLAs, it is imperative to let everyone within your team know about your plan. Inform the team about the reasons for creating the SLAs and what you plan to achieve in the long run.
Once the team understands your purpose for introducing SLA, create the level agreement according to the needs of your business and employees at large. This is for the benefit of your business in ensuring that no vital element is left out.
3. Align SLA with Customers’ Needs
Customer satisfaction begins with understanding your customers’ needs, pain points, and service expectations. This is why it is imperative to align your SLA with your customers’ needs to get the customers desired outcome, thus, leading to satisfactory services.
One of the best ways to know customers’ needs is by interacting with them physically or through online platforms. Ask the customers various questions as you analyze the answers to create effective SLAs that will help you manage customers’ expectations.
4. Measure Teams SLA Performance
It is imperative to select suitable metrics to measure service performance and align them with your business needs and service expectations. Below are the various SLA metrics you can use.
- User satisfaction
- Service uptime
- Service availability
- Response and resolution time
These SLA metrics help you monitor the team’s performance and determine whether you are making progress. You can monitor performance from time to time as you work towards achieving your needs.
5. Be Flexible with the SLAs
SLA best practices change over time. It is imperative to review and adjust the SLAs for continual service improvement. Adjust changes that do not add value to your business as you focus on customer needs. For instance, you can change the response time, service hours, uptime, and availability to meet your service level targets smoothly. This helps you build customer trust and loyalty while complying with SLA regulations.
6. Create an Improvement Plan
Some businesses face SLA breaches because of non-compliance. This comes from not having an improvement plan to adopt effective service level agreement best practices that advance management processes. So, create a plan to continuously review service level targets, evaluate the current IT help desk performance and use the generated feedback to improve your operations.
7. Analyze Potential Challenges
Sometimes, a business may face various situations that affect the overall operations. Therefore, it is best to analyze the usual and unusual situations that hinder operations. This will enable you to devise creative strategies to offer satisfactory customer service. When you get prepared in time, you won’t have to worry about potential challenges, thus, promoting business continuity.
8. Set Clear Communication Channels
Communication is a vital element that lets you know what your customers need. So, determine clear communication channels, which could be via email, calls, chat, or ticket portal that is easily accessible to your customers and target audience.
Let your customers know about the communication channels, response time, and issue resolution time. This prevents conflicts, thus, increasing customer loyalty and retention.
The Bottom Line
Well-generated service level agreements are vital to promoting a sustainable relationship between a vendor and an organization. They help both parties remain accountable and enjoy transparency with no conflicts. Therefore, it is fundamental to work with an experienced service provider who understands your business needs and expectations and can deliver based on the SLA. Check out our managed services provider solutions.