Service Level Agreements

Service level agreements (SLAs) are part of a general move towards quality and accountability and emphasize the importance of the ‘internal’ customer. They are usually a form of ‘contract’ between two departments or sections within the same organization.

Coverage of an SLA

Service Level Agreements normally:

  • specify the level of the service provided – i.e. frequency, coverage, timescales, etc
  • incorporate limitations or may include details of the refunds or compensation available if things do not go to plan
  • can be indicators of quality
  • make expectations explicit
  • help promote the service and the service provider
  • assist communication
  • may help clarify the service which can be expected and what is not available
  • ensure that providers become accountable for delivering the service and its quality
  • indicate personal responsibilities and accountabilities of both supplier and customer
  • include charges to be applied – where these exist
  • ensure that customers and users become aware of the costs of the service and any additional cost if they change their minds or their requirements.

General Standards

SLAs are related to general ‘standards’ used for internal management purposes. They can help flesh out job descriptions and appear in some appraisal and performance related pay systems. Standards can be incorporated, selectively, within service level agreements. SLAs may also be reflected in customer charters.

What is an SLA?

An important component of Customer Service, an SLA is an agreement, usually written, within an organization and made between the provider of a service and those receiving it. It is like a contract, but is not binding in law. Like a contract for services, it:

  • defines the service to be delivered, specifies volumes, quality and timing
  • confirms agreed level of charges
  • describes how any problems will be handled.

The period covered by SLAs is often the organization’s financial year, but it can be for another period e.g. a project life, a trading period.

Why have SLAs?

It is probably easiest to think of this in terms of what the position would be like if no SLA existed for a service critical to the success of the business. Take for example, an SLA which one organization has with its IT section for the provision of all computer services. Without the agreed SLA:

  • there would be no common agreement about what computer services the business needs, when they must be delivered, or what quality is required
  • there would be no clearly agreed procedures for dealing with any problems, or breakdowns in the service
  • the organization would be unable to monitor service delivery effectively
  • users could not demonstrate that they had been charged correctly if they did not know what services they were expecting in relation to what was billed.

Contents of an SLA

The content of an SLA will depend on many things, for example the nature of the service being provided, the culture of the organization, and the coverage of the agreement (whether there are one or many services; one or many users). In general terms, an SLA should be written in a clear and unambiguous style, it should be specific rather than vague, and it should be measurable and relevant to the situation.

In general an SLA should consist of:

  • a brief general statement summarizing the services to be provided
  • definitions of the two parties to the agreement – who is providing the services to whom
  • the duration of the agreement
  • the arrangements for monitoring and review
  • a procedure for settling disputes
  • what resources, information or other help the user may have to provide
  • contact points for both parties
  • the basis of any charges – what has to be paid and how this is to be paid.

Specifying the Services

Specifying the services to be provided puts flesh on the bones of the SLA. Specifications for all types of support services could set out:

  • the precise nature of each function or service provided
  • the volumes and quality to be achieved for each of these services
  • whether optional services are on offer – and if so, what they are and what they cost
  • what procedure should be followed if it becomes necessary to vary the agreement or specification
  • where applicable, the response times to be achieved by the provider when receiving requests for assistance
  • sanctions for non supply or poor quality.

Putting People into SLAs

Putting an SLA into place often changes traditional working arrangements and relationships. Colleagues who have previously had little, if any, understanding of how their work impacts on others are suddenly ‘contracted’ to work in certain ways and offer certain standards. At the worst, colleagues who have little liking or respect for other colleagues can feel they are being ‘forced’ to provide a service which they see as unreasonable or unrealistic.

To make sure that an SLA runs effectively and that the people concerned honour their responsibilities a planned programme of information and training will be necessary. At a minimum this should cover:

  • the business reason(s) behind the SLA
  • the internal customer – supplier chain and its requirements
  • the reasons the client/customer group requires a guarantee of service level
  • the behaviours, skills and competences required of people in the service providing section
  • individual, team and group responsibilities
  • consequences to the client and to the business of failing to honour the SLA requirements
  • monitoring and maintenance arrangements
  • sanctions agreed
  • payment terms if appropriate.

SLAs are a powerful way of formalizing levels of service. To be effective, they need to be business linked, clearly specified, understood by all parties and made to work.

SLAs are growing in use and application. They are very important to levels of both internal and external Customer Service. This paper briefly examines some of the issues crucial to the design and implementation of SLAs. For help in designing SLAs or training people to implement them, please contact us.