A service level agreement (SLA) is an important component of a service contract between a provider and its customer. It defines measurable aspects of the services provided that must be met for the contract to be considered successfully executed. It is a legal agreement that usually includes financial penalties to the provider if services are not carried out satisfactorily.
IT service providers make extensive use of SLAs to eliminate customer confusion and manage their expectations. Entering into a service relationship without a detailed understanding of its scope is a recipe for disaster. It is imperative to iron things out before commencing the service or be subject to unreasonable demands from uninformed clients.
The Key Components of an SLA
A viable service level agreement needs to incorporate multiple elements that are agreed upon by the provider and customer. Many service organizations have stock SLAs that highlight their offerings and can be easily tailored to meet the requirements of specific customers. Here are some of the items that need to be clarified in writing in an SLA.
- Detailed Description of Services – All services that will be provided need to be spelled out. In addition to describing the activities and processes that will be used to fulfill the agreement, other factors such as system availability need to be codified in the SLA.
- Service Standards – The technical quality of the provided services needs to be documented in the SLA. Customer expectations will be based on these standards, making it essential that they are successfully met.
- Roles and Responsibilities – Customers and providers both have responsibilities that impact the levels of service that are delivered. For instance, problems may need to be reported by the client and addressed by the provider within a certain timeframe. These need to be fully understood and accepted as part of the agreement.
- Evaluation Criteria – There needs to be methods in place to evaluate the performance of the services encompassed by the SLA. These need to be carefully considered during the creation of the agreement. They will determine the level of success attained by the partnership and influence the ability to engage the customer for further services.
- SLA Duration – Clearly defined start and end dates need to be negotiated and written into the agreement. This enables performance to be accurately monitored and may impact the procurement of resources to fulfill the SLA.
Creating Realistic SLAs
The SLAs entered into by a provider and customer need to realistically address the concerns of both parties. From the provider’s perspective, promising too much will result in failure to successfully deliver the services and exposure to the resulting penalties that may ensue. On the other hand, you don’t want to sell yourself short and fail to fully describe the benefits that a client can expect when engaging your service. Some best practices to consider when creating an SLA are:
- Set attainable goals – The services that will be delivered need to be evaluated honestly and goals set that can be readily met. Setting unrealistic customer expectations should be avoided at all costs as it will threaten the viability of the agreement.
- Engage legal expertise – An SLA is a legally binding document and should be created by legal professionals familiar with your industry. The SLA should include a hold harmless clause to protect the provider from circumstances outside your control.
- Perform sufficient training – All members of the organization need to be trained on specific protocols and procedures that are involved with providing the services defined in the SLA. Inadequate training can result in unnecessary and costly failures due to uninformed employees.
The Metrics That Support an SLA
Reporting is crucial for measuring the success or failure of the specific services of an SLA. Statistics illustrating performance against the baselines defined in the SLA are the basis for demonstrating its success to the customer. They also provide evidence that you may need to address client-initiated queries concerning the services they are receiving.
IDERA’s Precise for Databases is an effective monitoring tool that can gather the metrics needed to create new SLAs and report on those already in place. Companies that use Precise have benefited by improved confidence in the data used to create new SLAs. They have also enjoyed increased performance when measured against their current SLAs.
Precise enables an organization to gain visibility into performance metrics as they relate to physical and virtual infrastructures to quickly identify and correct problems. The tool offers a platform for intelligent monitoring and alerting to assist in maintaining appropriate service levels. Precise can also perform what-if analysis to help minimize risk when introducing changes that may lead to SLA penalties.
Precise is a great application for creating realistic SLAs and ensuring that they are successfully executed. You’ll feel better about your SLAs and so will your customers.