Service Level Agreements

Service level agreements (SLAs) are an invaluable component of any technology services provider. If you own or manage an IT services provider, the service level agreements furnishes your clients with information about the service including what is its scope, which party is responsible for what function, what events should trigger escalation procedures and what expectations are on resolution times.

Service level agreements can also provide some legal protection should a dispute arise between the parties. When well-thought-out, SLAs can create a healthy mutually-beneficial relationship between you as the service provider, and your clients. Here’s some tips on creating an service level agreements that works for everyone.

1. Set Attainable Reasonable Goals

An SLA is an opportunity to demonstrate the competitiveness of your business. However, you have to be careful not to get carried away in your zeal to impress. Do not exaggerate the capabilities of your product in order to win customers.

Remember, an SLA is legally binding and must only list the exact things you commit to do for your customers while clarifying what is outside the contract scope. The language should be simple and crystal clear thereby leaving no room for ambiguity, confusion or multiple interpretation.

You are better off under-promising and over-delivering than the other way around. Make commitments you’re certain you can keep.

2. Be Transparent and Honest

An SLA is not a sales or marketing document. It shouldn’t have the type of aggressive language found in a sales pitch. Don’t bank on the SLA to convince a prospect or sweeten the value proposition. Stay completely honest with yourself and your clients. Treat your SLA as a contractual agreement.

The SLA should remove all subjectivity in the relationship by being specific and clear. It’s not always possible to avoid jargon especially in tech SLAs but you should strive to keep them at the bare minimum. Whenever you use a term that a layman may not recognize, have a section at the end of the document where you define the word.

3. Obtain Legal Expertise

As a legally binding agreement, it would be a catastrophic mistake for you to craft an SLA without seeking the advice of a lawyer. A surprising number of small tech firms see the SLA as primarily a technical document and therefore view obtaining a legal opinion as an unnecessary expense. It’s a classic case of being penny-wise but pound-foolish.

If one client sues you for breach of contract and your SLA’s wording wasn’t watertight, they can be awarded damages that may lead to the eventual collapse of your business. Seeking a lawyer is prudent. Make sure you engage a lawyer who understands the technology industry and has lengthy experience crafting similar SLAs for tech service providers.

4. Train Your Employees

Your staff must be thoroughly and continuously trained on SLA expectations and protocols to reduce the risk of miscommunication. The nature and depth of the training should be tailored to each employee’s responsibilities as far as enforcing the SLA is concerned. For example, staff in charge of server management software should understand how application monitoring helps your business comply with the SLA.

Each worker should clearly understand what components of the SLA fall within their domain and what they are expected to do. The training should be regular to ensure employees always remember their role and to accommodate new staff who have not been taken through the SLA before.

5. Mitigate Against Liability

Your business does not operate in a vacuum. There are certain people and products your business depends on that aren’t within your control. Your SLA is a legal contract and should therefore include clauses that shield you from liability in the event of incidents that you aren’t responsible for.

An effective SLA must be founded on a workable and practical approach toward giving your clients assurance on the quality of your service. A good SLA provides a conducive environment for establishing a healthy long-term relationship with your customers.


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