How to Quickly set, measure, and report on SLAs

As a business owner or a lead of an IT department, you must have a technical support process that meets the demand of the company and customer support. An SLA (service level agreement) is one of the finest ways to ensure that everyone is on the same page when it comes to standards and service. By creating a service level agreement, business owners and service providers can work through customers’ needs and expectations to ensure they get what they are paying for. Businesses must develop clear and measurable criteria in order to achieve this.

SLAs are commonly implemented by service suppliers who are unaware of the need for them. So, creating one might feel daunting, and they do not understand where to start and what to include. Let us see what exactly SLA is and how to set, measure, and report on SLA.

What is SLA?

A service level agreement aka SLA is a contract between the service provider and the customer that specifies and commits the service provider to a required level of service.

SLA defines the level of service business owners expect from a vendor, distribute the metrics by which service is measured and which should not, as well as define the remedies and/or penalties that should be agreed-on service levels if not achieved requirement.

Who needs a service-level agreement?

SLAs are a key element of an agreement with a service provider. It helps service providers in defining how the service will be measured, the agreed-upon service levels, estimated uptime, and how the penalties will be charged be if service levels do not meet. SLAs assist businesses in setting up expectations for both the client and the service provider.

It includes state metrics, expectations, and responsibilities so that if any issue happens with the service, which can be escalated to higher authorities. Both parties involved need to have a clear understanding of the requirements. SLAs are protect both the client and service provider in the agreement.

Various Types of SLAs

There are common types of SLAs that people are using today. Large organizations may have various kinds of SLAs in place even between their various internal departments and internal service level.

SLAs based on customers

An SLA based on the customer is an agreement with a specific customer and covers all the services and products they use. For example, if any organization opt for telecommunication services, they agree to utilize various services such as data, VoIP, SMS, and many other.  For those services, they sign an agreement that is called customer-based SLA. Similarly, if the organization uses specific hardware they must opt for another SLA for that vendor.

SLAs based on service

An SLA based on service is an agreement between a service provider and all the customers. For example, if an organization is using the same IT service provider for their multiple departments, they need to do service-based SLA as the service provider is the same for all services.

Multi-level SLAs

A multi-level SLA is an SLA that is combined into different SLA levels, including corporate-level, customer-level, and service-level, where each level focuses on different customers using the same services. Multi-level SLAs allow customers to add more conditions and customizations as per the requirements of their business.

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Core components of an SLA

SLAs are usually combined of similar kinds of components that can include any of the following:

• Service overview – a basic overview of the agreement, involved parties, service dates, stakeholders, and provided services.
• Definition of the service – a definition of the service including how it will be delivered, execution process, hours of operation, scheduled maintenance, etc.
• Performance of service – howservice performance levels will be addressed and monitored, what statistics will be used, and how they ensure service levels are being met continually.
• Resolutions of service issues – this component highlights the steps involved for reporting an issue with the service, the resolution process, and the time of the issue resolution.
• Service redressing – this component includes the detailed conditions if the service provider cannot meet or fail to fulfill the agreed service level as defined in the SLA including the penalties. In other words, this includes compensation details such as refunds or credits if any, or even the right to terminate the SLA by the customer.

Metrics measured in an SLA

The metrics used to measure SLAs can vary depending on the type of SLA and services being used by the customer. Some of the key metrics involved with services management that organizations may have heard or come across include call abandonment rate, turnaround time (TAT), total resolution time (TRT), and mean time to recovery (MTTR).

Many SLAs follow the guidelines defined by the ITIL (Information Technology Infrastructure Library), specifically in the case of IT services. ITIL is a set of best practices for IT service management that may be used to achieve the right balance of business goals and IT services. One of the more talked about metrics for IT service providers is uptime.

For example, in the SLA agreement, the service provider may agree to maintain 99.999% uptime, which is also commonly known as the “five nines” of uptime. The level of uptime indicates that there will be no more than five and half minutes of downtime per year. If this service level does not meet, and the client experiences downtime for a longer period, frequently or in small outages throughout the year, there can be high penalties, such as deduction in revenue, negative branding, and frustrated customers.

To verify the service levels, most service providers make statistics available, usually on an online portal. Customers can check all the details related to SLA such as whether SLAs are being met, whether they are eligible for any service credits, or if there are any penalties laid out in the SLA.

Read this article – 5 Practical tips to set, measure and report SLAs for a detailed overview.

Key Take Away

Usually, the SLAs help organizations in ensuring all the services are being performed smoothly as per the SLA agreement. However, the client and the service provider should work together while identifying the terms and conditions of the SLA contract to eliminate any misunderstanding about the process and reporting methods.