5 Essential Facts About IT Service Level Agreements

By David Jones

When purchasing IT goods and services, clients expect managed service providers (MSP) to detail the kind of service they’ll offer in writing. It’s more than just noting that the MSP will “do a fine job” and leave it at that. What counts as a ‘fine job?’ How can both parties determine if the MSP did a fine job? What will happen if the MSP fails to live up to the client’s expectations?

A service level agreement (SLA) should contain the answers to these questions and more. This single document outlines the metrics and other information whenever the MSP renders services to the client. Without an SLA, both parties will try to blame one another if something goes awry throughout the contract, making resolution almost impossible.

Considering their complicated nature, IT goods and services are no stranger to SLAs; they’re a must for any transaction. Here are a few facts about these documents that clients should note.

  • An SLA Is Only Half of The Formula

While a crucial document in itself, an SLA is rarely alone in the grand scheme of things. The SLA is somewhat like an appendix to a more encompassing document known as the master service agreement (MSA). Both contracts are related to rendering services, but their difference lies with their scopes.

An SLA is concerned with the relationship between the MSP and the client regarding a specific project. On the other hand, an MSA governs the details of transactions between the two parties for the foreseeable future. Some contract law experts use these terms interchangeably, but the SLA’s specificity compared to an MSA is enough of a distinction.

  • Shared Services Demand SLAs More Than Ever

As shared services become more commonplace due to the erratic nature of today’s economy, SLAs find themselves in the limelight more often than before. In such a business model, SLAs grant more transparency to clients by outlining crucial details like the benefits of managed IT services clients can expect. 

With clear language in writing, shared services can manage more realistic client expectations, greater financial control, and greater flexibility in a rapidly-changing business climate. Never has this case been truer than now, when more businesses are undergoing small or large-scale digital transformation. 

  • Customers Are Not The Only ‘Second Party’ In An SLA

While most SLAs are between the MSP and the customer, the latter isn’t the only viable second party in such an agreement. These customer-based SLAs are only one of three types that MSPs employ, the other two being internal and multilevel SLAs.

Aside from customer-based SLAs, an MSP may draft separate internal SLAs for use between its departments. In most cases, these contracts establish an agreement that one department will take action based on the other department’s performance. For instance, if the sales team achieves a high closing rate, the marketing team must increase the number of generated leads.

Meanwhile, a multilevel SLA involves more than a single second party. It outlines the terms of the document among three distinct levels: corporate, customer (departmental), and service. A multilevel SLA should address the needs and concerns of each group for a seamless experience. 

  • SLAs Use Metrics

Quality can be hard to quantify without bases. That’s why SLAs should define relevant metrics for measuring the level of service provided. Metrics help customers as much as the support team monitoring and analyzing them. 

As with business performance metrics, there’s no need for an SLA to cover all known metrics. As one expert wrote, not all necessary metrics can be measured, and not all measurable metrics are necessary. That said, high-performing service desks generally measure the following:

  • First response time
  • Resolution time
  • Waiting time for support
  • Waiting time for third-party support
  • Resolved requests via knowledge base

Metrics become more critical when taking the SLA’s somewhat static nature. Continually monitoring and assessing relevant dynamic metrics helps SLAs adapt to changing needs.

  • The Terms Don’t Stay Constant 

Lastly, keep in mind that nothing lasts forever. Both the MSP and the client undergo significant changes over time, which is why their SLA must be constantly updated to reflect these changes. How often the SLA needs updating depends on a slew of factors, with the most important being:

  • Technological advances improving metric data gathering and analysis
  • The MSP introducing a new service or phasing out an old one
  • The client’s requirements have changed with the improvement in processes
  • The client’s standard workloads have changed

Conclusion

As this article has explained in detail, an SLA is more than just a contract. It lays the foundation for both parties to measure and assess how well the MSP fulfilled the client’s IT requirements. It’s such an important document to have that hiring an MSP that doesn’t provide an SLA from the get-go is nothing short of a red flag.

Interesting Related Article: “What is Rapid Prototyping and How Does It Work?“