The ABCs of SLAs

The ABCs of SLAs

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In an ideal world you’d be able to contract someone to deliver a service and be sure in the knowledge that they would do so – on time, every time and to a standard with which you were happy. In the real world, you need a service level agreement (SLA). In much the same way that a contract outlines a relationship between two parties – and let’s face it, you wouldn’t enter into an agreement without a contract – an SLA outlines the details of what you and your service provider have agreed.

The devil’s in the detail

While this might sound like a contract, there are differences between the two. If a contract establishes the fact that two parties have entered into an agreement, an SLA covers all the details of what has been agreed upon and how it will be carried out.

For example, a contract will establish that your company has entered into an agreement with a cleaning firm to clean your offices. It will outline the details of payment, the terms of the contract, the duration, termination details and the like. The SLA however will go into fine detail about the types of cleaning that will be done – window washing, vacuuming, tidying, polishing, mopping etc – and how often and to what standard these specific services will be delivered.

“It will also provide detail on how the quality of the service will be assessed and, importantly, the penalties that the service provider will incur if these standards are not met,” explains Johann Eiselen, CEO of FMSA, a fully registered tertiary training institution offering qualifications in the field of facilities management. An SLA doesn’t replace a contract but is therefore usually as an attachment to one. It’s crucial for recording the specifics of your expectations from your service provider – and because it provides you with the tools to manage the level of service you receive, and a course of action should these levels not be met.

The makings of a good SLA

“SLAs are not just the domain of lawyers, finance guys or subject matter experts – they are the domain of all of these players, and a good SLA has typically received input from each of these parties,” says Eiselen.

Further elements of a good SLA

  1. Be precise. Clear and precise definitions and descriptions of the service and standards required are a must. It’s  a good idea to get a subject matter expert involved here who is familiar with the service being provided.
  2. A system to manage the SLA. This is not a document to sign and file away in a drawer. If it’s going to be worth anything, it needs to be properly managed.
  3. Assess the service. A system to regularly assess the level of service being provided and generate reports will help you keep track of any delivery failure.
  4. A good penalty clause is a must. This should outline the precise procedure to be followed if the service provider fails to deliver to the required standard, as well as the fines they will incur for doing so. It should also clearly define what constitutes a ‘breach‘.
  5. Know the agreement. A clear understanding on your part of the different aspects of the service being provided is important. Without this you’ll find it difficult to define what needs to be delivered and to what standard.
Juliet Pitman
Juliet Pitman is a features writer at Entrepreneur Magazine.