Service Level Agreements are now an important part of governance capability in sourcing relationships.  Service Level Agreements ensure clear accountability between clients and service providers.  This site is an aid to those who are engaged in creating and managing SLAs - whether as client or a service provider.  We hope you will provide relevant information on specific SLAs, SLA traning and our Sourcing Governance Tool. 

 

 

 

 

 

 

The key aspects of ongoing service level management are discussed and described extensively in the articles section of this site.  The key points to note are listed below.

 

Definition: A  SERVICE LEVEL AGREEMENT (SLA) is an agreement between two parties where one is the client and the other is the service provider. Service Level Agreements are usually negotiated.  Service Level Agreements may exist between parties within an organisation (e.g. Shared Services) or between two third parties.  SLAs are being increasingly used as management tools within organisations to give better visibility of the quality of internal services. The SLA documents the common understanding about services, priorities, responsibilities, and commercial commitments. Each service should be clearly and succinctly defined.

SERIVICE LEVEL MANAGEMENT refers to the process of ongoing management of Service Level Agreements.  The term can be used to refer to management of any types of services (IT,HR, Facilities, Finance and Accounting etc.).  Many organisations will spend time and effort documenting Service Level Agreements with their service providers and/or clients.  Very often this process will also include involvement from external advisors.   Ongoing management of your Service Level Agreement is critical to ensure that you are getting the level of service you expect.  Increasing organisations are including business value metrics in SLAs – as these become more prevalent management of SLAs will be a critical measure of the extent to which an organisation is delivering on its stated strategy and business objectives.

 

Initiation: CREATE EFFECTIVE SERVICE LEVEL AGREEMENTS

• Identify clearly the parties to the SLA
• Identify clearly the responsibilities of all associated with the SLA
• Ensure that all responsibilities are assigned to named individuals and roles within the SLA
• Ensure the SLA has a clear start and finish date
• Ensure that activities which need to be taken upon completion are clearly identified in the SLA
• Clearly articulate metrics in the SLA – ensure that they can be measured and reported on
• Clearly document the performance threshold levels with the SLA – what level of performance per metric is green, amber or red.
• Ensure there is formal agreement to the document by both parties
• Agree regular review periods
• Agree triggers for ad hoc reviews

 

Reporting: ENSURE YOUR SLAS ARE REPORTED ON REGULARLY

• Ensure that there is an agreed reporting mechanism between both parties to the agreement
• Ensure that reports are made at the right level – sometimes there is a tendancy to start producing very detailed reports which vary away from the agreed metrics.  SLA reports should be based only on the metrics in the SLA.  Any deviation is a change to the SLA which needs to go through a governance process.
• Ensure that your reports contain quantitative date in relation to the metrics.  Some SLA reports contain only % levels of compliance – this information does not facilitate substantial analysis of service performance.
• Ensure that commentary is included where performance against metrics is below acceptable levels.
• Ensure that you have reports which show performance trends over time – not individual reports on a month by month basis
• Where you have multiple SLAs across the same and different services ensure that they performance can be easily compared and contrasted across providers.

 

Management: USE THE INFORMATION IN SLA REPORTS TO MANAGE YOUR BUSINESS EFFECTIVELY

• Review and analyse the performance levels in SLA reports
• Generate insights based on the content of your reports
• Ensure that service review are scheduled on a regular basis
• Ensure that service review meetings focus on service issues – not operational issues.  There should be a forum to discuss specific operational issues  - but it is better to keep your Service Review focussed on Service Levels and systematic actions be taken to improve them if appropriate.
• Share information in the Service Level Reports with your colleagues as appropriate (effective knowledge management)

 

 

The SLA records a common understanding about services, priorities, responsibilities, guarantees, and warranties. Each area of service scope should have the "level of service" defined. The SLA may specify the levels of availability, serviceability, performance, operation, or other attributes of the service, such as billing. The "level of service" can also be specified as "target" and "minimum," which allows customers to be informed what to expect (the minimum), whilst providing a measurable (average) target value that shows the level of organization performance. In some contracts, penalties may be agreed upon in the case of non-compliance of the SLA (but see "internal" customers below). It is important to note that the "agreement" relates to the services the customer receives, and not how the service provider delivers that service.