Service Level Agreement Article

Developing an SLA in a week, or even a month, is both difficult and not recommended. It is difficult due to the heavy workload associated with tasks such as negotiating service standards, setting up follow-up mechanisms, preparing support procedures, obtaining authorizations and creating buy-ins. And this is not desirable because the process must help both parties lay the foundation for a strong, fruitful and long-term relationship. To rush into this process is to sabotage all the effort. A service level agreement (or SLA) is a part of a contract that precisely defines the services that a service provider will provide and the level or standard required for those services. The SLA is usually part of an outsourcing or service management contract or can be used to provide services in facility management contracts and other agreements. This article is aimed primarily at customers and offers some simple tips for creating effective SLAs. For the SLA to have a “bite”, the lack of a level of service must have financial consequences for the service provider. This is most often done through the inclusion of a credit system for services. In essence, where the service provider does not meet the agreed performance standards, the service provider pays or credits the customer an agreed amount to encourage performance improvement. These service credits can be measured in different ways. For example, if the 99.5% level for reporting is not reached, the SLA could include a service credit that grants some price reduction for each 0.5% discount per week. Alternatively, service credits can be awarded if, for example, there are three or more errors to fulfill a service level within a certain period of time.

Here too, each level of service must be considered individually and a reasonable level of credit must be agreed between the provider and the customer if the agreed level is not reached over a given period. It is important to ensure that service credits are appropriate and encourage the service provider to do better, and that they intervene early enough to make a difference. All general issues relevant to the organization are covered and are the same throughout the organization. For example, in organization-level security SLAs, each employee must create passwords with 8 characters and change them every 30 days – or each employee must have an access card with a printed photo. Now, SLAs are common in outsourcing / off-shoring for it, data centers, service desks, BPO (Business Process Outsourcing), HRO (outsourced human resources), etc. Even with both elements in mind, a successful agreement requires much more than just inserting the elements into an SLA model. The process of planning, implementing, and implementing an agreement is typically a process of collecting, analyzing, documenting, presenting, educating, negotiating, and building consensus over several months, and the process must involve customers. If customers are not part of the process, it is not an agreement! IT organizations that manage multiple service providers may want to enter into operational level agreements (OLAs) that specify how certain parties involved in the IT service delivery process interact with each other in order to maintain performance.

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