Service level credits, or simply service credits, should be the only recourse available to customers to compensate for service level outages. A service credit deducts an amount of money from the total amount payable under the contract if the service provider does not meet service delivery and performance standards. Overall, an SLA typically includes a statement of purpose, a list of the services covered by the agreement, and a definition of the responsibilities of the service provider and the customer under the SLA. Although your SLA is a documented agreement, it doesn`t have to be long or too complicated. It is a flexible and lively document. My advice? Create one with this template and examples and consult your customers on perceived gaps. Because unforeseen cases are inevitable, you can recall and optimize the SLA if necessary. The SLA will also include a section that lists exclusions, i.e. situations where the guarantees of an SLA – and penalties for non-compliance with these guarantees – do not apply.
The list may include events such as natural disasters or acts of terrorism. This section is sometimes referred to as a force majeure clause, which is intended to exempt the service provider from events beyond its reasonable control. The service level agreement should include a clause detailing what happens with respect to confidential information exchanged between the parties. It should specify how the information is identified, how it is handled by one of the parties, and what restrictions apply to disclosure and abuse. For the SLA to have a ”bite”, failure to meet service levels must have financial consequences for the service provider. This is most often achieved by adopting a service credit scheme. Essentially, the service provider pays or credits the customer with an agreed amount, which should serve as an incentive to improve performance if the service provider does not meet the agreed performance standards. These service credits can be measured in several ways. For example, if the 99.5% level for reporting is not met, the SLA could include a service credit that grants a specific price reduction for each performance deviation of 0.5% each week.
Alternatively, service credits can be assigned if, for example, three or more errors occur to reach a service level within a certain period of time. Again, each level of service must be considered individually and a reasonable level of credit must be agreed between the service provider and the customer if the agreed level is not reached over a certain period of time. The important thing is to make sure that the service credits are adequate and encourage the service provider to do better, and that they arrive early enough to make a difference. A service level agreement (SLA) is a contract between a service provider and its customers that documents the services that the provider will provide and defines the service standards that the provider is required to meet. Service Tracking and Reporting – This section defines the reporting structure, follow-up intervals and stakeholders involved in the agreement. The provider`s responsibilities and priorities in performing the service are also defined in the Service Level Agreement. Service Description – The ALC requires detailed descriptions of each service offered in all possible circumstances, including processing times. Service definitions should include how services are deployed, whether a maintenance service is offered, what is the uptime, where dependencies exist, an overview of processes, and a list of all technologies and applications used. Most service providers have standard SLAs – sometimes several that reflect different levels of service at different prices – which can be a good starting point for negotiations. However, these need to be reviewed and modified by the client and legal counsel, as they are usually inclined to play in the provider`s favor. Since the late 1980s, SLAs have been used by fixed telecommunications operators. SLAs are so common these days that large organizations have many different SLAs within the company itself.
Two different units in an organization script an SLA, one unit being the customer and another being the service provider. This practice helps to maintain the same quality of service between different units of the organization and also across multiple locations in the organization. This internal SLA script also makes it possible to compare the quality of service between an internal department and an external service provider. [4] Ensure that measures reflect factors under the control of the service provider. To motivate good behavior, SLA metrics must reflect the factors that are under the control of the externalizer. A typical mistake is to punish the service provider for delays caused by the customer`s lack of performance. For example, if the customer provides application code change specifications several weeks late, it is unfair and demotivating to keep the service provider on a predefined delivery date. Making the SLA two-way by measuring the client`s performance in interdependent actions is a great way to focus on the expected results. These systems and processes are often controlled by specialized third-party companies.
If this is the case, it is necessary that the third party is also involved in the SLA negotiations. This gives them clarity on the service levels that need to be tracked and explanations on how to track them. Typically, these processes and methods are left to the outsourcing company to ensure that these processes and methods can support the SLA. However, it is recommended that the client and the outsourcing company work together during the SLA negotiations to dispel misunderstandings about the process and method of support, as well as the management and reporting methods. Most service providers understand the need for service level agreements with their partners and customers. .