What is a service level agreement?
A service level agreement (SLA) is a contract that defines the level of service expected by a customer from a managed service provider (MSP) or supplier. It contains a list of services, responsibilities, and objectives a customer can expect a service provider or supplier to provide.
SLAs are crucial to ensuring that the MSPs are meeting their agreed-upon responsibilities. At the same time, an SLA is beneficial for an MSP as it can help MSPs legally outline the expectations and refuse services that exceed those expectations.
Service level agreements are generally negotiated between customers and service providers. They can include metrics for measuring the accuracy and extent to which the MSPs provide the services and the penalties if the level of service isn’t maintained. Along with the level of service, SLAs help specify the exact timing when the services will be delivered.
SLAs are also crucial for establishing benchmarks or performance targets for service providers to meet. Customers can use such benchmarks and service characteristics to compare different service providers.
What is SLA management?
SLA management or service level management (SLM) is the process of managing SLAs and ensuring all services and processes provided comply with the level of service specified in the contract.
It involves defining, agreeing, documenting, monitoring, measuring, reviewing, and reporting the level of services offered by MSPs. ITSM tools can help manage service level agreements, track the level of service the SLA outlines, and bring overall transparency around service delivery.
The objective of service level management
SLM includes maintaining the SLM framework, which involves designing and maintaining the structure of customer agreements and providing templates for different SLM documents.
Identification of customer requirements is another crucial aspect of SLA management. It also involves monitoring and reporting the effectiveness of service and seeking regular customer reviews.
Adept SLA management:
- Makes realistic conditions for the service providers
- Tries to meet customer expectations
- Monitors the level of customer satisfaction and tries to improve it
- Sets specific parameters for measuring the level of service
- Complies with the terms and conditions mutually agreed between the customers and the service providers
- Strives to avoid future conflicts
- Increases the level of communication and improves the relationship between both parties
- Ensures that there is constant improvement in the service level
Types of service level agreements
Knowing the different types of SLAs can give you a better understanding of how SLA management applies to each. The following are three main types of service level agreements.
Customer-based SLA
A customer-based service level agreement is used for specific customers and includes relevant services a customer needs. It generally contains information about the types of services and the expected time of delivery.
Service-based SLA
Service-based service level agreements are created by service providers for a single type of service that’s offered to all of its customers. Since the service has an unchanging standard, it’s convenient and straightforward to service providers. It’s useful when a business offers specific services with different response times and resolutions.
Multi-level SLA
Multi-level service level agreements are created by a service provider for larger customers covering numerous services, multiple departments, or several geographical locations. Multi-level SLAs are the most complex form of service level agreements.
Multi-level SLA can be categorized into three sub-tiers:
- Corporate-level SLA offers SLM for every user across a customer organization. Since this level of SLA doesn’t deal with critical issues, SLA performance updates and reviews are performed less frequently.
- Customer-level SLA offers SLM for specific customer groups, regardless of the services being used.
- Service-level SLA offers SLA management for particular services for specific customer groups.
Benefits of SLA management
SLA management is responsible for ensuring that both the service provider and the customer have a clear understanding and expectation about the level of service to be delivered. This benefits both the parties involved; service providers don’t have to provide services exceeding the scope, and customers will get the exact level of service they agreed upon.
The following are some of the notable benefits of SLA management:
- Represents the service provider to the customer and vice versa
- Sets proper standards for customer service
- Brings two-way accountability
- Defines procedures that both the parties need to follow
- Offers a consistent channel of communication between the customer and the MSP
- Distinguishes the roles and responsibilities
- Specifies the method of service change request implementation
- Answers questions and solves disagreements by referring to the SLA
- Offers recourse for unmet service obligations
- Helps with the process of SLA amendment
SLA management best practices
SLA management necessitates regular goal analysis, defining performance standards, and tracking key performance metrics.
The following are some of the best practices for effective management of SLAs:
- Write service level agreements in clear, jargon-free language
- Identify all stakeholders
- Understand customer needs, level of service, and the time commitment required
- Ensure that all stakeholders understand the purpose of SLA
- Utilize ITSM tools and service desk software
- Hold a meeting involving both parties
- Create and maintain accessible documentation around SLA management
- Steer clear of an unrealistic level of service expectations
- Clarify who’s responsible for tracking SLA performance
- Review and modify SLAs periodically
- Amend contracts when the situation demands
- Send periodic surveys to customers
- Operate in the spirit of SLA, rather than following it word by word
Amal Joby
Amal is a Research Analyst at G2 researching the cybersecurity, blockchain, and machine learning space. He's fascinated by the human mind and hopes to decipher it in its entirety one day. In his free time, you can find him reading books, obsessing over sci-fi movies, or fighting the urge to have a slice of pizza.
