Service Level Agreement (SLA) - Here's What You Need To Know About It

What is an SLA?

As we all know, human wants are unlimited. Since the saying is authentic, one needs to put it in mind whenever they render any business-related services. That's because customers often ask for more. Customers always want it all, usually at a fair price or even free of charge (in a few cases). That said, you will need to put a few things in place for you to have satisfied customers. First, you need to state what services you're offering clearly and the ones you're not contributing. Apart from that, there's also a need for both parties to agree on the service-level requirements. Lastly, you'll need to monitor and report delivery against these requirements. Looking at all the factors mentioned above, it means you'll need a tremendous service-level agreement (SLA) in place for you to have satisfied customers.

But here's a question, what is a service-level agreement, and how important is it for businesses? In this post, we'll be shedding light on these questions by sharing with you everything you need to know about SLA. Some of what we'll be discussing include the benefits of the service-level agreement and SLA types. We'll also look at the key factors that you need to consider while creating a service-level agreement. That said, let's dive right in.

A service level agreement is a contract that exists between a service provider and its customers. It outlines the level of services that the end-users should expect from the supplier. Furthermore, an SLA document helps outline the metrics that'll be utilized to measure the service's success. Also, it's worth noting that there are always remedies or penalties when people don't meet these agreements. These are also agreed upon and clearly stated in the doc.

Most times, service level agreements exist between companies and external suppliers. However, they may also exist internally - between two departments within a company. For instance, let's say an SLA is between the marketing and sales departments of an organization. It means the SLA will outline the goals of the two departments. Apart from that, it'll also include the steps that the two departments will take to support each other.

What Are The Benefits Of SLA For Businesses Owners And Customers?

A service-level agreement offers both the end-users and the supplier a host of benefits. Although we won't mention all of them, here are some advantages of having a good SLA in place below.

Peace of Mind

One of the benefits of having a great and well-written SLA is that it provides customers with peace of mind. How do I mean? A service-level agreement will help to boost the trust between the end-users and the service provider. Furthermore, it'll also provide your customers with peace of mind, since they know they can always hold you accountable - if things fail to work for them as expected.

Improves Customer Service

Problem resolution cycle time is the time it takes for organizations to resolve different cases with their customers. When you don't have an SLA document in place, you're most likely going to see an increase in your company's cycle times. However, with a well-written service-level agreement doc., what you stand to achieve is improving your customer service.

Win-Win for Both Parties

Another benefit of an SLA document is that it helps to protect both the service provider and end-user. This agreement ensures that both parties are on the same page. And whenever anything goes wrong, it also gives the customers the ability to hold the suppliers accountable. Without SLA, a service provider can easily deny having an agreement with its customers regarding their expectations. This is also the same for end-users, as they may even ask for more even after providing them with the right service.

Types Of Service-level Agreement In case you don't know, there are three basic types of service level agreement. These include customer service-level agreement, internal service-level agreement, and multi-level service-level agreement. Let's take it one at a time and see what each of them stands for below.

Customer Service-Level Agreement Customer SLA, also known as an external service agreement, is a contract between the service provider and a customer. This agreement helps to specify the type of services that the end-user should expect. It also outlines the conditions of the service availability, responsibilities of both parties, escalation procedures, and possibly the cancellation terms.

Internal Service-level Agreement The second type of SLA on this list is the internal service-level agreement. This agreement exists internally between two different departments (e.g., sales and marketing) of an organization. Furthermore, this type of SLA helps to outline how the two departments plan to generate leads. Apart from that, it also outlines how the two departments plan to work together, ensuring that they achieve their goals.

Multi-Level Service-Level Agreement Lastly, there is another type of SLA, called the multi-level service-level agreement. Speaking of this SLA, it's the agreement that exists when there is more than one end-user or one service provider.

Taking Your Business to the Next Level

Key Components Of A Good Service Level Agreement

Things you need to include in a service-level agreement include a summary of the parties' deal, goals, a well-detailed description of what's required to reach goals, reporting procedures, termination circumstances, and penalties.

Speaking of the summary of agreements, the SLA must outline how the service's success will be measured. As for the parties' goals, they must be outlined in the document if the SLA internal. However, for an external SLA, only the goals of the customers are included. However, the service provider must ensure that it has all it takes to deliver what the end-users expect.

Furthermore, the SLA must be drafted to outline what each of the parties needs to achieve their goals. As far as the reporting procedure is concerned, it involves clearly stating, in the SLA, who to report to when problems arise. This also includes the reporting process that must be followed. Lastly, the SLA must also outline the penalties involved if any parties fail to meet up with the laid down agreement. So, the SLA must hammer on how the service provider will compensate the end-users if it's unable to meet up with their expectations.

It's no more news that you stand to gain a lot when you have an excellent SLA in place. But the question is, how do you go about creating a standard agreement document that addresses everything? Here's where Clarity Ventures comes into the scene. With our eCommerce service, you can rest assured of the right agreement support for your business. That said, you can reach out to one of our experts regarding your project by checking here.