What are SLAs and How to Use Them

What are SLAs and How to Use Them

An SLA (service-level agreement) is a contract that you make with your customers. It clearly defines the expectations and responsibilities for each party.

The SLA is often part of the service provider's master service agreement. Between the two existing contracts, the SLA defines specifics in regards to metrics and related services.

This guide will answer the question, "What are SLAs and how to use them?". It will also provide information about why you need them for project management.

So, whenever you're ready to take your business to the next stage, keep reading.

What Are SLAs?: The Basics

An SLA is a service-level agreement that defines the level of availability, performance, and responsiveness for services. In other words, it's a way to measure how well your company or organization meets its customers' needs. The better you meet those expectations, the more likely they will remain loyal to your business.

Every customer has different criteria for making them happy and satisfied with an online service like Netflix or Amazon Prime Video.

Suppose they have issues streaming videos on demand (VOD) through either website at any point in time. This is because of slow Internet connection speeds or high rates of packet loss. This results in choppy video playback, they are not going to be very pleased about it.

In the same way, companies that provide online services for businesses have issues with meeting their customers' expectations. This occurs if they do not use SLAs to define those quality metrics as a part of service level requirements and objectives (SLROs).

Having an agreement between all parties involved guarantees everyone is on the same page about how well each group should perform and what it will take to meet or exceed customer satisfaction targets.

Now that you know what are SLAs, let's take a look at some of the components of SLAs.

What Are Service Level Requirements?

Service-level agreements can be very simple or very complex, depending on your specific needs. However, everyone has certain elements in common:

  • Defines availability levels such as "up 24/24," which means 100% of the time is required
  • Specifies response time in seconds or minutes
  • Includes information about customer support hours (24/365 is an example)
  • Shows the service credit policy if a set of requirements is not met.

Different service level agreements can be used for project management, depending on what you need to improve.

IT Service Level Agreement

This agreement specifies technical performance metrics like speed or bandwidth.

It also specifies availability targets of any services provided by one company to another.

Business Relationship SLA

A business relationship between two companies usually includes more than just technical specifications.

It's common for them also include other criteria such as privacy policies and dispute resolution procedures.

End-User SLA

Customers who have their own contracts with your company will want to include their own example of a service level requirement.

In this agreement, you must define those metrics for them to know how well your services have to perform for that customer. You should also cover what it takes if there is a problem with meeting the SLRs. SLA tracking is often used to digest and assess the metrics.

What Are Service-Level Objectives?

In addition, every service level agreement should also clearly state something about "service-level objective". These are key performance indicators or quality of experience targets.

Many companies will publish these benchmarks on public websites like Wikipedia, so customers always know what's expected. However, even when no one else can see them, you still need to share that information internally within your business.

This is true when working with remote teams who may not be located at the same office.

If you have a remote team of developers and your company has published the response time goal for their services as "less than 30 seconds".

This is what everyone in the organization needs to know. With this in mind, they can work together toward that common objective. They no longer have to be assuming it's okay if customer service takes much longer than expected when customers call them about problems with accessing those resources.

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How Do You Use SLAs?

In an ideal world, every business would already be using service-level agreements all the time. They're handy for project management no matter what industry you are in or how many people are working on any given task.

But even though most companies recognize their value, only a very little amount of companies use formalized contracts.

If you want to improve your company's project management, understanding SLAs can help. Using them will not only make life easier for everyone involved.

It'll also show stakeholders that you take their expectations seriously. This means they are more likely to trust you and continue working with your business in the future.

Companies' most common mistake when defining service level agreements is having too many. There's also the issue of focusing on unimportant aspects like web page load times instead of customer satisfaction.

Hence, there are no real consequences if those benchmarks aren't met (or at least none that anyone takes seriously). You should always focus on what really matters for each kind of service contract. This is because the SLA definition of "success" is different for every company.

How to Create an SLA: Determine What Matters

You should first identify your specific service level requirements. Only then decide which ones are critical business objectives that one must meet, or else it will hurt the company's success.

Next, determine how much leeway you can afford to give for those metrics. What is an "unacceptable" result (the red line) vs. a "warning" one (yellow)?
Please make sure everyone in the organization knows these boundaries.

There must be clear guidelines when creating their own email SLA with customers or internal project management teams.

Once you've decided on the criteria used to define SLAs, find out if there's any guidance already available online from industry peers.

There's lots of advice for free so take advantage of other people's experience whenever possible!

Make It Official, No Exceptions

You probably already have informal agreements with your clients or stakeholders that outline how long something will take to complete.

Still, those are not enough if they aren't backed up by a formal contract that includes all the same details. Not to mention, consequences when deadlines slip. Having no hard rules is basically asking for trouble down the road.

If you first explain to them the consequences of not meeting that deadline and then give a realistic timeframe for when one can complete it.

Once everyone understands what "on time" means based on your SLAs (and how bad things will get if they aren't met), hold people accountable. Include those metrics in every project plan moving forward. Hence, there's never any confusion about what is expected out of each member of the team.

You should have regular check-ins where stakeholders are updated on progress. The original targets should be used as benchmarks whenever possible. This is so no one falls behind without knowing it before it's too late!

Communicate Clearly & Often

No matter how many times you've gone over these service level agreements in the past, make sure you set aside some time to go over them. Do this whenever a new project is launched, or changes are made that could affect how quickly everything gets done.

Not meeting your deadlines hurts your business more than many people realize. Unhappy clients can be costly if their complaints spread across social media networks like wildfire. This means not only have you lost out on future income from this account. It also means money spent trying to win back their trust won't pay off.

If they ever need something else done in the future, there's a good chance that the project will go to another that can provide a faster turnaround. It's important for everyone on your team to take these service-level agreements seriously. They must do everything they possibly can to meet or exceed those expectations whenever possible!

Stay Updated

Even though you did all of this work upfront before any projects began, don't just throw out these SLAs when things get busy down the road.

Instead, add checkpoints throughout each milestone where progress is reviewed by both parties. This is so no one gets blindsided later and feels like their trust has been broken because of it.

The whole reason for putting these benchmarks into place was so everyone understands what's expected of them. They must also understand why it matters when those expectations aren't met.

If they don't understand something, then now is the perfect chance to clear up any confusion before it turns into bigger issues down the road!

SLA Done Right

When it comes to project management, understanding what are SLAs is key.

Assess deadlines, plan accordingly and communicate clearly. These are all part of the process to ensure projects get completed on time without confusion or complication down the road.

Keep these guidelines in mind whenever a new project arises, and everything should go smoothly!

Helpmonks is a shared inbox with SLA workflows embedded in the core. If you're interested in powerful collaboration tools to upgrade your business, get in touch with us, and we will accommodate your needs.