The Ultimate Guide to SLAs

Imagine this: Your team and your customers are frustrated because tickets are always getting lost in the shuffle. Your agents are unsure of what to prioritize and lack clear goals and benchmarks on how to improve. Every day, your customers demand more than you can deliver. It's a complete scene of chaos, and customer satisfaction is dwindling before your eyes.

In this scenario, service-level agreements (SLAs) can save the day, which makes them an essential part of any outsourcing or technology vendor contract. By establishing expectations between a company and service providers, they provide peace of mind for a business owner. The service provider can also rest easy as the SLA prevents instances in which the client asks for something that has not been agreed upon.

If ITSM solutions are the superheroes of process improvement initiatives, powerful SLAs are their ultimate sidekicks. To get the most out of a service provider and business owner relationship, an SLA should be put in place.

This article will go through every aspect of SLAs, including what they are, their benefits and drawbacks, some frequently asked questions, and how you can manage them.

What is an SLA?

As a service provider, a service-level agreement is a simple contract between you and a service customer that outlines the services you will provide, the level of responsiveness that can be expected, and the performance metrics that will be used. This helps in identifying the services required and the expected level of service for both parties.

Each SLA consists of a time metric and a corresponding goal or target that helps you measure the performance of your services from the customer’s point of view. This makes it easier for you to track your team's performance while conveying service agreements to your consumers.

Give me an example!

Picture this: You work at an internet service provider. When customers sign up for an internet package, they expect a certain download speed, an upload speed, the maximum allowed download size, uptime, and more from you. For example, they may want each P1-level incident to be resolved in four hours based on a 24/7 calendar. This is an SLA, and as you can see, it is more than just a contract document. It’s your promise to your customers.

SLAs can exist between an organization and its external customers or between departments within an organization.

Defining SLAs in the service design phase is critical as it can vastly impact the software architecture and underpinnings of IT services. In that regard, if you want to increase customer satisfaction and deliver exceptional services, you might need to invest in SLA management.

What’s in an SLA?

An SLA's fundamental components are a time metric and a corresponding goal or target. It can also include:

  • A description of the services that will be provided

  • Expected service levels for each service description

  • Metrics used to measure the services

  • The duties and responsibilities of each party

  • Remedies or penalties for breach

  • A protocol for adding and removing metrics

Standard SLAs frequently include response time for support, service availability, uptime, downtime for maintenance, disaster recovery, and indemnification.

Remember that the SLA's goal is always to guarantee service delivery at targeted service levels, which is why it's especially important to align metrics with business objectives and goals. In order to represent this, both parties define the service levels and penalties. The penalties are often monetary, in which case the service provider is incentivized to prevent loss. This is how the SLA mechanism works.

Why do I need an SLA?

As we have mentioned previously, SLAs are an essential part of an IT vendor contract: They compile information on all services and their agreed-upon expected reliability into a single document, as well as state metrics, responsibilities, and expectations. This ensures both parties have the same understanding of the requirements, and if there are issues with the service, neither party can plead ignorance.

To ensure satisfaction, the SLAs should be in line with the contract's technology or business goals; otherwise, a misalignment can have a negative effect on the quality of service delivery, customer experience, and deal pricing.

In addition to boosting customer satisfaction, implementing SLAs in your workflow can benefit your IT team in many ways. A few examples include:

1. SLAs strengthen the relationship between the IT team and customers.

Since SLAs help reduce risk-related concerns and uncertainty, they improve trust between the parties.

2. SLAs formalize communication.

SLAs allow all parties and stakeholders to have organized discussions based on previously established terms and make sure everyone is on the same page.

3. SLAs boost productivity and lead the way.

SLAs give structure to your tickets, which means your IT team will always know which issue to solve first. This will improve team productivity and improve morale.

How can I manage my SLAs?

While all of this may appear straightforward in theory, SLAs can be challenging to monitor, report on, and meet in practice. Configuring and changing them in numerous service desks can also be a hassle.

For instance, your service desk software should be extremely adaptable so that you can create SLA goals based on practically any set of parameters you define. It doesn't end there, either, as it's crucial that you can easily change or alter them in order to keep your team's priorities fully in line with fast-changing business requirements.

Within Jira Service Management, you can manage your SLAs with an all-in-one tool called Time to SLA from Appfire. Time to SLA is a fully customizable tool that instantly visualizes how your teams are performing, warns you when an SLA is about to be breached so that you never miss a deadline, and allows you to build trust with your customers.

With Time to SLA, you’re in the driver’s seat. You can easily set up and manage an infinite number of SLAs based on your own organizational needs, as well as create numerous types of reports to keep track of your performance.

If you’re seeking a tool that will make creating and managing SLAs a breeze, give Time to SLA a try for free. It’s available on all Atlassian platforms.