SLA (Service Level Agreements) is the most common term that resonates during the time of a service or a product acquisition. SLA is not just a piece of paper that just implies a bond or an agreement between two parties. Rather it is a detailed schema of the product or services that a customer has rights for. Generally, in organizations, IT leaders are the key stakeholders for SLA, apart from the top-level management no other employee will have an idea of what an SLA comprises off.
Most of the companies still do not use a proper SLA, they rely on traditional FCR( first contact resolution) to measure their customer service performance. This cannot capture the accurate metrics required to evaluate the service performance.
Let’s understand what SLA actually means and its significance
SLA or Service-level agreements are business agreements or contracts made between a customer and a service or product providers.
SLA is documented proof of services that a service provider agreed upon for a customer. This document includes all the specific services that are offered, metrics that quantify service performance, and remedies for non-performance.
SLAs are not just among the vendors and customers. In fact, these agreements are also made between two parties for services exchange upon an agreed level of performance.
For instance, it is very common for the IT departments to create SLAs with various business units about the delivery of specific actions by IT. Generally, SLAs are assumed to be made among businesses, but within the organization also there will be SLAs made for the provision or completion of a specific activity among departments.
Practically, SLAs with service or product delivery vendors are most common and are often the matter of agreements and disagreements among participants based on the fulfillment of an SLA's parameters. It is crucial that IT decision-makers and leaders recognize the significance of SLA compliance and how to best comply with expectations therein.
Types of SLAs
SLAs in simpler terms is an agreement that establishes expectations pertaining to a service or product and to evaluate vendor performance. SLAs are generally made among corporate IT organizations, cloud service providers, IT product or service providers, and network service carriers
There are three different forms of SLAs:
Service-based SLAs. This form of SLAs is made against a service and includes a set of parameters that specifically determine what a customer has to expect over a service hired. This type of SLA is common for all the customers that hire that particular service.
Customer-based SLAs. This form of SLAs is defined between a product or service provider and the customer. This type so SLA are generally customized for the individual customer and covers all services being provided to that customer
Multilevel SLAs. This form of SLAs focuses on the commercial level and is functional to all the users in an organization. Multilevel SLAs are used to evade replicas or contradictory agreements across the organization.
Components of SLAs
The following are a set of components that are typically included in SLAs, compliance with all of these below-mentioned components is essential:
- A brief description and scope of the services to be provided: The SLA needs to incorporate a detailed description of each and every service being offered, with the turnaround times under all various circumstances.
- Service definitions must be included, which defines how the services are to be delivered. It covers all the components pertaining to the service offerings such as whether or not maintenance service is offered, the hours of operation, technologies, and applications to be used, and an outline of the processes
- Includes sites or location(s) where services are to be delivered;
- Includes the duties and responsibilities that have to be delivered by the service provider
- Responsibilities and duties of the customer or service recipient; very specific on what a customer is responsible for
- Set of processes that have to perform to monitor, track and evaluate the performance
- A detailed description of the acceptable performance levels
- protection of intellectual property, as applicable
- Performance metrics to be used to evaluate the overall performance
- Determines the processes that the service provider will execute to resolve poor performance
- Includes escalation procedures, remedies for failure to provide acceptable performance and time frames
- Compliance with standards, legislation, regulation, and acceptable practices;
- The time frame for termination of the agreement.
All the above-listed components can be considered as an SLA compliance requirement. Customers must prioritize which features of service provisioning are the most significant from a business standpoint of view, and all these must be included in compliance documents.
What a service provider can do with SLA’s
As per the expectation set by the service provider, their team must be capable enough to triage, forward, and escalate customer cases.
Usually, customer requirements will vary from one another, some customers may not always need customer support services, and some are maybe the premium customers who need faster support.
In this case, an SLA will help service providers in setting up due dates as per the customer's priorities. This will allow the support team to triage, forward, and escalate customer cases in some really useful ways
Organizations can also use SLAs to trace certain performance metrics that allow them to have a deep insight of the customer support being provided.
What can be measured with an SLA
- Number of conversations to resolve a case: How many escalations is there between customers and support staff? Are customers being asked to perform repetitive activities? Do the support staff have the context they need?
- The number of case re-opens This signals that there are adjacent issues once a case is closed that require a customer to once again call up support and have it reopened.
- Time between responses: If there are multiple escalations, are support teams providing timely responses throughout the case? This is especially useful when support teams are involved.
Overall time to resolution: How much time is taking to resolve different kinds of cases? These metrics can help in identifying bottlenecks