Elements & Best Practices of SLA

Elements of Service Level Agreement & SLA Best Practices

SLAs or a Service Level Agreement is the documented contract created between the service provider and the end client, defining the level of services provided and expected. SLAs provide foundation for your managed services providers and if they are not created with care, they do not weather bad times, leaving long lasting imprints on the client relationships. Thus it is of utmost importance that SLAs be made with clear and concise message marking the services to be provided, responsibilities at each end commercial coordinates and remedies/penalties in case of breach. But this is not it.. there is much more to a complete SLA and this is where best practices play a crucial role. This article will enthral upon the completeness of an SLA before you enter into an association with your business process re-engineering partners.

Most service providers have standard SLA formats, which are updated for every client with some basic details which are bound to vary for each client. Sometimes, they have more than one templates to cater to different requirements from different clients. But they are usually slanted towards the service providers so need a careful review from the client’s perspective. Ideally an SLA should be created in a way that default is not rewarding for either parties and both ends should be equally involved in their respective domains. For example, if supplier delays the task, he is liable to be penalised but what if it is caused because client delayed certain approvals? Set the expectations right from the beginning through carefully drafted SLAs.

Key Components of SLAs

In general, SLAs should comprise of every aspect of service, management and delivery of service at every level, including segregation of duties & responsibilities, measurable KPIs, communication plan, escalation metrics, risk mitigation plan and contract termination terms. Ideally, it should be a tool used to measure performance and identify areas for improvement and resources required and certainly not to be used as punitive weapons to beat each other up with.

We can broadly categorise the SLA elements as follows –

  1. General Overview : This section includes basics of the agreement, like names of parties involved (generally the service provider and the client), date starting which it is applicable and broad introduction of services rendered.
  2. Description of Services : You need to have every service offered under all possible circumstances and their turn-around times defined in details. In case some services are offered under special cases, they should be well defined too. In case TATs differ in some special circumstances, this section should define it. What systems are supported, how the services are delivered, hours of operation, maintenance service (if offered), dependencies on other people (for approvals), processes (before or after) as well as technology (other applications), all goes in here.
  3. Exclusions and Exemptions : Ideally what is NOT offered should also be mentioned clearly, not leaving anything to assumption for either parties.
  4. Service Performance Level : Various performance measurement metrics should be defined in this section. Client has certain expectations and service provider has certain process. Both ends should reach a mutual consent to list all metrics to measure what service provider has accomplished and define the performance levels.
  5. Service Provider and Customer Responsibilities : There should not be no-one’s land or everyone’s field. Define responsibilities for both parties. This will certainly avoid any blame game in future.
  6. General Security Measures : For every client data is of utmost importance and service providers are expected to have all security measures in place to keep the integrity of any data/information shared by the client. This section should clearly define what all security measures are taken or to be taken by service provider. Non-disclosure, anti-poaching, IT security, are a few which should be carefully drafted and agreed upon.
  7. Problem Management and Disaster Recovery Process : Problems are neither invited nor welcomed, but they do come. There should be a sturdy problem management and disaster recovery mechanism in place which needs to be clearly communicated in this section.
  8. Service Tracking & Reporting : Client holds rights to track the service levels and performance. Based upon mutually discussed and agreed upon terms, reporting structure, intervals and stake-holders should be defined in this section.
  9. Periodic Review & Change Process : The service level agreement should be considered as a dynamic document which needs upgrade based on few external factors like – client needs have changed, work environment has changed or better tools & processes have evolved. The period of review and process of change in SLA should be defined in this section for future consumption of either parties.
  10. Commercial Coordinates : It is important to mention all commercial coordinates along with price of each service offered, method of calculation, with all possible variations, along with payment terms.
  11. Termination of Agreement Process : Under what circumstances the agreement will be terminated or will expire should be clearly stated in this document, along with notice period from either side.
  12. Signatures : Relevant stakeholders and authorised people from both ends, should sign the document approving of every detail listed on it, abiding both parties to the agreement till it remains valid.

Best Practices : Service Level Agreements

Now that we have all the SLA elements in place, it is important to know the best practices to draft a complete and reliable agreement document for both parties – the service provide and the client –

  • Specific– An SLA must be specific and detailed enough to define expectations for services / work precisely eliminating any confusion at either end.
  • QuantifiedDeliverables should be quantified to be able to measure the deliverables on a pre-defined format.
  • Measurable – There must be a way to track actual performance against the promised SLA. All services must be measurable.
  • Comprehensive – the contract should cover all services and all possible contractual obligations for all parties involved.
  • Realistic– The expectations set through SLA must be realistic. Unrealistic and above par goals can demotivate the team and non-delivery will only lead to failures on agreed terms.
  • RelevantThe SLA must be directly related to the service to be offered and delivered and it must be relevant to evaluating performance against that goal.
  • Authoritative– This agreement document must be the authoritative document binding both parties.
  • Time framesThe SLA must contain a time frame against which the service will be delivered.
  • Division of work– The “Maker” cannot be a Checker and “Checker” cannot be a Maker. The responsibility should be clearly defined to fulfill the SOX compliance.
  • Escalation metrics – The escalation metrics must be clearly defined. Once the parties enter into the agreement, the client must be aware whom to escalate in case the services were not rendered properly.
  • Non-technical – Instead of using lot of jargon-terms and technical terms, keep the language simple for reference of non-technical people also. It should use a simple language, easily understandable by all.

There is lot more that can be written about this piece of paper, which becomes the foundation of client-provider relationship. But key elements and best practices, if followed, lead to a complete service levell agreement.

About Devna Maheshwari

Devna is a 14+ years’ experienced marketing and business development professional who has a rich agency background enabling her with a rich and diversified experience across multiple industries. Having worked with companies like Johnson & Jonhson and Franchise India, she takes a pride with her in-depth understanding of digital marketing strategies including Search Engine Marketing, Social Media Marketing, Email Marketing & Content Marketing. Keeping a tab on the constant changes in digital marketing world, she likes to be always updated on changing Google algorithms and having a hands on experience on various digital marketing and analytics tools like hubspot, moz, SEMrush, GWT, ScreamingFrog, etc.

During her tenure of little over 14 years, she has worked with clients like NASSCOM (Delhi & Mumbai), Groupon, Tata Power, Wipro, Investors Clinic, Vishwa Yuvak Kendra, St. Xaviers School and many reputed hospitals including AIIMS and GB Pant. While she kept engaged with business development activities for the agencies she has been associated with, she has been the SPOC for her clients as her focus has been on working as digital partner for her clients, showing them the roadmap of digital success, while taking responsibility of their web business goals.

Personally she is a highly motivated individual, who believes in team work, loves to take new challenges and has capacity to thrive upon challenges, can work well under pressure.


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