SLA, or a Service Level Agreement, is a key document to determine service standards and avoid misunderstandings with clients or within teams. The goal is to provide a quality service, meeting expectations.
This agreement with clients, suppliers and even internal teams will list responsibilities, deadlines and other relevant information so that everyone involved knows the level of quality expected for a task.
In this article, you will understand more about what consists of an SLA document, what types of SLA can be found and how to create one for your company.
What is a Service Level Agreement?
The Service Level Agreement, known as SLA, is a document. It offers more detailed information about how a service should be delivered, defining standards, norms and procedures that will ensure the quality of said service.
The idea behind SLA began in the IT sector, initially used in computational services. However, it didn’t take long for other departments to understand the value of an agreement aiming for quality.
An SLA will provide more information on what everyone’s role is and what the common goal should be. Some documents will even include key performance indicators to ensure that the expectations have been met, as well as penalty clauses if necessary.
For that very reason, an SLA can be used in any business and can provide a plan for growth and development in every department.
What are the benefits of an SLA?
An SLA works as a guide for both clients and service providers. As we have discussed above, it will detail expectations for the performance of different tasks, in order to reach the highest level of quality. Even though everyone might be committed to this goal, having an SLA means every step of this process is transparent.
Having an SLA also gives you and your business the confidence that tasks will be followed through at the appropriate time. As a result, the SLA generates customer satisfaction since they will receive a satisfactory end product or experience.
Let’s look at other benefits of an SLA in your business:
1. More flexible contracts
The SLA can be edited at any point. Once you have optimised processes and are more aware of what you can provide within a specific time frame, you can change the SLA. You can also include challenges that didn’t exist before or surprises along the way.
SLAs are more flexible than contracts and leave room for adjustments as the work progresses.
2. Standardized services
An SLA serves the purpose of creating a standard of service. With expectations and deadlines laid out, every participant in the process can understand their role and what needs to be done.
As a result, productivity increases and a workflow is created. Work relations also improve as conflicts become a lot more predictable and diverted.
3. Improved communication
With a detailed description of people’s responsibilities and expectations, it is no surprise that communication between clients, suppliers and even departments significantly improved.
An SLA makes every aspect of the work transparent, making it clear for everyone involved. People will be aware of their rights and duties, becoming confident about what they can demand and what they should provide.
4. Increased customer satisfaction
The level of trust and transparency provided by an SLA means clients and partners are happier with what they are receiving. It is much easier to retain and surprise customers when you have a self-explanatory document stating what is that you must provide and what they can expect.
Types of SLA
Service agreements can take many different forms and be used by a series of departments and businesses.
In general, there are two types of SLAs. One is focused on the client, and the other on the service. Each has its characteristics and can be adapted according to your company’s needs and demands.
SLA focused on the customer
A Service Level Agreement focused on the customer aims to clarify the obligations of the service provider and align customer expectations. In this case, the SLA will outline all tasks performed by the company and everything your customers can ask from you.
Of course, this document’s exact outline or model will vary depending on your clients’ needs. You might have to develop a different SLA for each client.
SLA focused on the service
Since an SLA focused on services is all about what you and your company provide, this document is simpler than an SLA focused on customers. It is possible to develop just one base document that can be used for different clients.
This type of SLA improves contract management and the company’s daily activities, streamlining your service. However, even though a single document can be used for several clients, bear in mind that it needs to be constantly updated. The SLA also needs to cover what is disclosed in contracts, so ensure both documents are aligned.
Why have an SLA in your company
Since an SLA determines everything that should be fulfilled by both the supplying company and the customer, the document serves as a safety net for every party involved.
By creating a clear outline of tasks, deadlines and expectations, you can avoid miscommunications, ensuring compensation in case of unfulfilled obligations.
It is important to note that the primary purpose of an SLA is to ensure the quality of services provided, which is crucial for the growth and development of any company. If your company aims to improve services, keep customers satisfied and grow over time, an SLA can be an invaluable tool for your business.
What to include in SLAs
We have explained how crucial and beneficial SLAs are. Therefore, creating one for yourself requires attention and dedication. Items should be laid out clearly, without the possibility of misinterpretation.
Here are a few things to keep in mind when creating your document:
Define when your team is available
Unfortunately, it is common for customers or other departments to make demands after hours. Determining a work schedule is an essential first step in creating an SLA, as it establishes when it is appropriate to contact your team early on.
Use clear and straightforward language
Even though SLAs can be seen as official documents stating rules and obligations, they shouldn’t be a legal or formal list. Therefore, there is no need for a complicated language. Everyone should understand the SLA.
Don’t make promises, but list what is feasible
An SLA is no place to make promises to your clients or partners. It should list what you are capable of doing at a reasonable time rather than what you could do on special occasions. Create a simple agreement set that covers daily activities and not month-long projects.
Determine a deadline to respond to clients and deliver tasks
Deadlines are critical aspects of SLAs and are often a source of frustration. It is important that both the service provider and the customer are aware of how long it’s necessary to perform certain tasks and how frequently you can offer updates.
Some activities will be more urgent than others, and the SLA should cover that. Make room for changes in schedule or priorities depending on what comes up.
The service provider and the customer need to understand top priorities and what can be postponed depending on demand.
How to create an SLA
Now that you understand what you should include in an SLA and how important it is to have one for your company and your customers, it is time to put that knowledge into practice.
Step 1: Assess your business and your routine
The first step to creating an SLA is to deeply understand your business, your needs and your employees’ daily activities. If necessary, discuss their challenges and opportunities with all departments so you know what to include in the agreement.
Step 2: Define responsibilities and tasks
Once you have all the needs and opportunities listed, you can understand each department’s key responsibilities and what they must execute.
Determine who or what team will be responsible for each task, explaining clearly what each activity entails.
Step 3: Establish goals and standards
Remember, SLAs are all about the quality of service. This should be clearly defined by your document, establishing goals for your team and stating what should be the standard for activities provided.
You can update this item in the document as work progresses or goals change.
Step 4: Determine deadlines
As seen above, deadlines can be a significant source of frustration. Therefore, determining clear and attainable deadlines is important in creating your SLA.
Every activity – or every stage – must have a completion date. It would help if you also determined the consequences of late actions or missed deadlines.
Step 5: Determine KPIs
Analysing results and understanding failures and successes are crucial in every business. Include key performance indicators in your SLA, monitoring the wins and achievements of your service.
SLAs can be crucial in creating and maintaining a quality standardised service. You can avoid frustrations, improve communication, and increase productivity by making expectations and obligations clear.
Having a service agreement is beneficial for every type of business and service. Still, it can be especially helpful in IT, where customers expect fast solutions and constant support. SLAs offer an opportunity to create a flexible list of tasks and deadlines, specifying everything required to fulfil obligations.
If having an SLA for each client seems daunting, consider using an ITSM system to help you manage tasks and improve communication between different departments.