Service-Level Agreement (SLA)
What is an SLA?
SLA refers to the services that a customer expects from a service provider and the metrics used to measure these services. It describes the products that need to be delivered, the department that can be approached for problems related to the user of services, and the penalties when the already decided services are not supplied. This is an important part of the technology vendor contract as it offers solutions when the requirements of the customers are not met by the vendor. This agreement to meet customer expectations may be between the company and external service providers or within the two departments of a company.
Types of SLA
- Service-based
When a variety of services are provided by a company with different resolution and response times. The client contacts the same service and the further subcategories in it include Standard or Premium SLA and incidence-kind or request-kind. The customers are further provided with more classifications according to the service: Gold, silver, and bronze. The Gold category is the most selective and demanding in its resolution and response times. While towards bronze the services slacken a bit.
2. Customer-based
This applies the SLA to a specific customer and all the services that they use. This type of SLA covers all the needs of the same client or business field. E.g an SLA each for software, hardware incidents, and queries or applications. This customer-based SLA applies to all previous clients, however, if a new client with his individual needs contacts the service, then a more personalized SLA is required.
3. Multi-Level SLA
This is a combination of both service and customer-based SLAs and applies to all the clients in an organization. Several conditions can be included in the same system as there are no complications between the agreements. This applies SLA to a specific department or even an SLA for a particular service in a department.
4. Contact-based SLA
It applies to a specific user that has standard-level agreements for service. It is understood to provide a customer with a different SLA if the company wants to retain the attention of that customer. The example here highlights how one customer requires the attention of 24 hours while the rest of the customers each need 10 hours of the service operating time. Hence, this SLA designates clients according to preferences.
What is Service-Level Management?
This is the procedure to manage service-level agreements. This helps monitor, daft, review, edit, and showcase the level of a company’s services.
How SLA can prove as a competitive advantage in a company
- Meet the customer’s expectations of a company’s service
2. Draft and agree on practical conditions that can be set forth by a company
3. To increase confidence and avoid any conflict since a good service-level agreement is an indicator of an intimate and trustworthy relationship
4. Fulfill the terms and conditions agreed upon and thus, contribute to customer loyalty
5. Propose a framework for measuring the level of services provided by a vendor
6. Helps the company improve their own services by cutting down on resolution time and requesting delivery times
7. The service provider is aware of the customer’s expectation so there is improved communication and mitigates chances of any misunderstanding of work-related objectives
8. A management standard is available that allows decorum as the regulations for service delivery between supplier and receiver are already made clear.
9. The metrics for service evaluation are stated so poor behavior by either the client or supplier is not tolerated. Such as when the service level is breached by a client for not providing timely information, the supplier is not penalized.
What are the basic constituents of a Service-Level Agreement?
Service Elements
The type of service provided service availability requirements, the time frame for which each service needs to be extended, the tradeoffs between customer service, and the responsibilities imparted to either party.
Management Elements
Criteria for measurement of services, clauses in the contract to protect one party from liability if a third party is harmed in any way, methods to edit and upgrade the agreement as required, and settlements for resolving disputes that arise along the way.
Types of SLA metrics that need to be supervised
The SLA plan should be kept as simple as possible to avoid confusion and any unnecessary costs. Choose a more user-friendly and easy-to-collect metric data operating system. Automated systems eliminate the errors that can be made using a manual collection of metrics.
Metrics to Monitor:
- Technical quality
The measurement of technical quality to evaluate factors like programming size and coding defects.
2. Defect rates
Examining the number of mistakes made in late deliveries or production failures like coding errors or missed deadlines.
3. Service availability
This refers to the specific times when the service is available. For instance, more service needs to be supplied for some busy hours in comparison to the more unoccupied ones.
4. Business results
The quality of products and services leads to customer satisfaction and increased engagement. Hence the IT clients like to include business process metrics in their SLAs.
5. Security
To maintain software and network security a lot of costs may be required. However, through SLA updating anti-virus policies provide preventative measures in case any mishap takes place.