You know Service Level Agreements (SLAs) are important. But they’re overwhelming, too. Creating one from scratch is a daunting task. None would voluntarily come forward and take this grunt work upon themselves.
SLAs ensure all parties live up to their commitments. These documents detail your service delivery promises and set the expectations right for everyone. They pave the path to better customer relationships.
So, it’s important that you chalk out Service Level Agreements well. Crisped and clipped. But you don’t have to do it alone.
In this article, we’re sharing Service Level Agreement examples and templates to help. We’re also exploring the key elements, the challenges and the best practices.
We’ll draft effective agreements together, not just good ones.
Let’s dive in.
What is Service Level Agreement
A Service Level Agreement (SLA) is a formal agreement about the service delivery between service providers and their customers. It outlines the services to deliver, the quality standards to maintain, and the important metrics to measure performance.
An SLA outlines the services to deliver, the quality standards, and the performance metrics.
For example, an agreement between Amazon Web Services (AWS) and Netflix might list cloud computing services like data storage, processing and delivery. AWS will maintain an uptime of 99.99% for all services, with promised resolution within four hours in case of problems.
Earlier, SLAs were mainly used in IT and software services. Today, they’re common in all types of service industries like healthcare, telecommunications, customer support and others.
Its purpose is to establish clear expectations and accountability for the parties involved.
Importance of Service Level Agreements
In service businesses, SLAs establish minimum levels of service quality to be expected. They ensure that the performance is consistent throughout.
1) Sets expectations and responsibilities
An effective Service Level Agreement is meant to clarify expectations and responsibilities for both parties. It outlines the scope of the service and the level of support the customer can expect. It helps avoid misunderstandings and disputes during service tenure.
2) Improves customer satisfaction
With a well-structured SLA in place, ambiguity in service delivery is reduced. You’re able to meet the agreed-upon standards and keep your customers satisfied. SLAs also create a culture of accountability within your team, improving long-term customer relationships.
3) Strengthens communication
SLA also sets the terms for a clear line of communication. It ensures both parties are aware of their responsibilities, thus taking the guesswork out. Properly outlined SLAs can reduce the number of clarification calls and emails.
4) Optimizes efficiency
An effective Service Level Agreement provides clear metrics for success. The explicit definition of targets and priorities helps define Standard Operating Procedures (SOPs) and Operational Level Agreements (OLAs) well. Specific metrics and standards can also help you identify areas for improvement in the service and adjust accordingly.
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5) Fastens conflict resolution
Another benefit of an SLA document is that it acts as a quick reference document to determine who is responsible for taking action to resolve an issue. SLAs outline the responsibilities of the parties in the event of service interruptions and other issues. You have got the complete process for reporting and addressing issues outlined.
Common Challenges with an SLA
Creating and maintaining an SLA is a team process. All stakeholders should be involved to ensure that their needs and expectations are met. And ensuring buying-in from each of them can be quite a challenge.
1) Defining clear objectives
The involvement of multiple stakeholders makes it difficult to define the objectives and scope of the service. Negotiating the right terms and conditions can take time and effort. Each person (or entity) will have different perspectives and priorities. So, preparing an SLA that aligns with all the business needs and goals while avoiding any ambiguity can be a challenging task.
2) Tracking performance
Often inadequate documentation makes it intimidating to track and report performance levels. SLAs are spread across several departments. Getting raw data, building reports, and pulling readable insights can take days. Thus, adjusting metrics and targets take a significant amount of time and effort.
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3) Updating in a timely manner
Among the most grueling challenges in maintaining an SLA is updating them as businesses evolve and processes change. Each change can take you into a rabbit hole of tasks: updating all the related documents, communicating the changes to everyone, and ensuring they’re on the same page (again). It’s a complex process, and it can be mind-numbing.
Key Elements of SLAs
Service Level Agreements exist in different forms and layouts. They can vary wildly depending on the industry and the services provided.
But the common elements in all SLAs are:
1) General Overview & Purpose
The General Overview and Purpose section provides an introduction to the SLA and describes the services covered. It outlines the scope of the agreement. The section also covers the basics of the agreement, such as the names of the parties involved and the effective date when the agreement begins.
2) Service Standards & Availability
This section outlines the details of specific services being provided. It mentions the agreed-upon service levels and expected uptime or service availability criteria. It can also include the details of regular maintenance/downtime windows. If you’re providing multiple services, service details should be listed for each separately.
3) Performance Metrics & KPIs
Performance Metrics and KPIs, as the name states, include details of service level targets. It lists the specific Key Performance Indicators (KPIs) for the services being provided. The section defines how service levels will be measured and tracked, and what are the acceptable levels for quality service.
4) Reporting & Review
Reporting and Review section outlines the frequency and process of reporting performances. It mentions how the service provider will report on the service levels, how frequently they’ll report, and how they’ll document and format the reports for presentation. The section also includes the review process to update the processes and KPIs accordingly.
5) Exceptions & Limitations
The section identifies conditions when the service provider may not be able to provide the agreed-upon services. It describes the service limitations and services that lie outside the scope of the SLA. It also lists the situations like natural disasters and holidays that affect response times, or emergency service for business-critical needs.
6) Problem Management
Problem Management section defines the support services available under the SLA. It outlines the protocols to handle technical issues that arise during service delivery. The section covers everything from incident reporting and escalation to problem resolution.
7) Roles & Responsibilities
Roles and Responsibilities section is a crucial part of an SLA. It lists all the obligations and responsibilities of the parties. It includes details of tasks to be performed by each party. And it can also include the agreed process of handling communication and disputes (for when a party breaches the terms of the agreement).
8) Change Management
Change Management section is dedicated to the process of making changes to the SLA. It lists how changes will be proposed and approved, along with the timeline for implementing and reviewing those changes. The section also includes details on communication about the changes to both parties.
9) Termination and Renewal
Termination and Renewal section, as evident from the name, outlines terms for both parties when they can cancel the agreement. It lists all the situations that can lead to termination and mentions the notice period required. The section also outlines the process of renewal and terms for the extension of the SLA.
Examples of Service Level Agreements
Service Level Agreements can be brief, five pages long, or detailed, with 100+ pages, depending on the complexity of the service provided.
Here are some sample SLAs from five different industries:
1) Information Technology SLA
IT is the most popular industry to use SLAs. These service providers have an array of services like cloud computing, network management and database management services. Consulting and security analysis also come among IT services.
Here’s an example IT SLA for Database Management Services
2) Customer Service SLA
Customer service is another aspect of business that benefits from well-documented SLAs. It includes a range of services like technical phone support, chat services and email handling. Service providers may also provide complete helpdesk BPO to their customers.
Here’s an example Customer Service SLA for Helpdesk BPO Services
3) Healthcare Industry SLA
In the healthcare industry, entities need support from third-party service providers regularly. These services include clinical services, laboratory services and radiology services. Medical records maintenance and patient transport also are a few other healthcare services.
Here’s an example Healthcare Industry SLA for Clinical Services
4) Logistics Industry SLA
Logistics companies use SLAs for all their services to their customers. Their range of offers includes transportation services, warehousing and distribution services and freight forwarding services. Logistics providers may also handle complete 3PL (Third-Party Logistics) services.
Here’s an example Logistics Industry SLA for Transportation Services
5) Education Industry SLA
Educational institutions may use SLAs to provide additional facilities and services to students. Library services, research facilities and administrative support are among the few such fields. Faculty support and clinical placements also come under educational services.
Here’s an example Education Industry SLA for Clinical Placements
The Process to Create an Effective SLA
An effective SLA is clear, concise and easy to implement. It meets the needs of the service provider as well as the customer. And the most important: It’s approved by all stakeholders.
Following are the steps to write a fail-proof Service Level Agreement:
1) Define SLA’s scope
The first step is to identify the requirements and list all the services to provide. Alongside, determine the stakeholders involved and define each party’s responsibilities. And make a note of the internal or external factors that might interfere with the agreed services. Create a list of exclusions and limitations, too, when the SLA won’t be in force.
2) Identify service levels & terms
Next, identify the metrics and specific service levels to measure performance. Set clear and measurable performance targets. Make sure that the metrics and targets align with the needs of the stakeholders. And that they should be achievable as well as challenging. Once done, also chalk out the penalties and compensations for failing to meet the targets.
3) Establish reporting & communication processes
It’s also important that you define how communication will take place among the stakeholders. These include regular meetings, performance updates and other communication needs. While you’re at it, determine how performance will be monitored and reported. Pin on the metrics to report, presentation format and even the review deadlines.
4) Document the agreement
Now, document everything. Write it in a clear and concise manner. Scribe is one of the best documentation tools you can use to create and implement an effective SLA. Its collaborative feature makes maintaining and updating SLAs a breezy affair.
5) Review and revise
For an SLA to be working in the changing business environment, you must review and revise it regularly. Updates may involve adjusting performance levels, setting new reporting methods, and even changing processes to meet the current needs.
However, it’s must that all stakeholders must be aware and in agreement with the changes in the SLA. Improve your documentation productivity with Scribe.
Scribe makes SLAs easy for the team
Scribe is a process documentation tool for teams to collaborate and outline documents with ease. Its shared workspace allows easy access to all documents, whether process guides or service agreements. Everything is kept secure online.
It smoothens the process of creating Service Level Agreements. It eases maintaining, editing and sharing documents with all stakeholders.
Scribe is valuable for creating all internal process documents. It uses visual documentation tools to create step-by-step guides, training manuals, agreements and other documents. It can even automate process documentation and enhance your team’s performance.
Best Practices for Creating SLAs
Follow these SLA best practices to ensure it meets all the needs and expectations:
i) Clearly define the scope of the SLA.
ii) Be realistic and clear about goals.
iii) Outline specific roles and responsibilities of each party.
iv) Consider the performance of all those involved in the work.
v) Document the agreement clearly and concisely.
vi) Keep the terms simple and easy to understand for all.
vii) Set deadlines and penalties for non-compliance.
viii) Use tools like Scribe for collaborative and easy creation.
Wrapping it up
Service Level Agreements ensure that service providers and customers understand their roles and responsibilities. They help maintain a positive business relationship between the parties.
However, penning an effective SLA can be a challenging process. It’s time-consuming to take care of all the cogs and wheels involved. And a seemingly harmless memory slip might lead to uncountable losses.
So, try out Scribe documentation tool for easy and hassle-free creation of agreements. Hoping the Service Level Agreement examples and tips will help you.