7 Reasons You Need a Service Level Agreement (SLA)

As companies become more sophisticated, the services they provide become increasingly complex.

And customer service professionals must perform well to ensure that customer support does its job well.

In addition, another point of attention is that users have a good service experience.

It is here that a SLA (Service Level Agreement) enters the scene.

An SLA defines the expectations between a company and service providers between the IT department and other departments within an organization.

It is a safety and security for everyone involved and ensures that services and employees are maintained to high standards.

There is nothing static about a good SLA, especially for small businesses.

It is a living document that changes as the relationship between a company and its service providers changes.

That said, there are several elements of an SLA that are consistent across industries and especially within the customer service industry.

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Elements of Service Level Agreements.

Generally speaking, SLAs include four elements:

  1. A statement of objectives;
  2. A list of services;
  3. The conflict resolution process;
  4. Remedies for poor provider performance.

Let's take a look at each of these elements.

Service level statement goals

First, the service level objectives (SLO) statement. SLOs form the core of an SLA and provide a backbone for companies that need to file disputes and claim remedies for poor service provider performance.

A statement of service level objectives describes the service provider's scope of work.

In customer service, typical service level objectives might include:

  • Call answering speed;
  • Waiting times;
  • Call completion time;
  • Complaint percentage;
  • First call resolution and;
  • Call quality scores.

SLOs can vary depending on the urgency of business needs, available resources, and budget. Objectives vary depending on where the emphasis needs to be placed on the provider's services.

In addition, the statement of objectives describes the performance measurement plans.

The customer provides goals that the service provider must achieve. These objectives make it easier to measure service provider performance.

The list of SLA services.

All SLAs include a list of services. This list explains what the customer expects from the service provider every day they work on a project.

The customer's primary responsibility to the service provider is to clearly communicate expectations and measure the provider's success.

For example, a business can expect call times of less than four minutes, wait times of less than five minutes, and a quality score of 92% or higher in line with the SLA.

These are examples of more specific SLOs, as we discussed earlier.

Conflict Resolution: Means and Mechanisms

Sometimes miscommunication happens and unfortunately it can lead to conflict.

Conflict is why having rules in place to resolve disputes is vital.

The dispute resolution process follows a 6-step method:

  1. First, clarify why there is a disagreement. Why are the two parties not agreeing? What is the point of divergence?
  2. Then establish a common goal. What is a common goal that both parties can agree on that would be a positive outcome?
  3. Third, discuss ways to achieve the common goal. How will everyone involved in dispute resolution achieve this positive outcome?
  4. Then determine the barriers to the common goal. What is preventing a satisfactory resolution?
  5. Fifth, agree on the best way to resolve the conflict. What is the solution that both parties can live with and how to get there?
  6. Finally, acknowledge the solution and determine resolution responsibilities. Recognize that common ground has been reached and accept responsibility for doing the work necessary for resolution.

The dispute resolution process gives everyone peace of mind that conflict can still result in a positive outcome.

Unfortunately, disputes cannot always be resolved if the cause is poor performance.

Sometimes remedies for poor performance are also needed, as we will see below.

Some Remedies for Poor ISP Performance

Unfortunately, there are times when a service provider fails to live up to expectations. Consequences for a service provider falling short include:

  • Fines - IT service providers may be required to pay fines. These fines are usually on a sliding scale.
  • Service Credits – In other cases, providers lend service credits to customers to compensate for poor performance. Credits can decrease the amount paid by the IT service provider or shorten the duration of the contract.

That alone is enough to prove that SLAs are a valuable organizational and relationship-building tool.

Let's take a look at some reasons why your business needs one.

Reasons why you need a service level agreement

Without further ado, here are 7 reasons why your business needs an SLA (service level agreement):

Alignment of expectations and requirements with service providers.

The main reason companies use a Service Level Agreement is to align expectations with their IT service provider.

Above all, SLAs help providers move forward with an understanding of what is expected.

Finally, they describe how this work will be measured.

Measuring service quality.

Second, when service quality expectations and SLOs are clear, there is no room for vendors to avoid taking responsibility for poor performance.

Suppliers are responsible for the quality of their work and for meeting customer expectations.

This responsibility ensures a long-term business relationship.

Clear expectations make everything easier.

Documentation of procedures and best practices.

First, you must describe procedures and best practices before you can measure quality.

Therefore, installing systems makes it easier for suppliers to focus on customers.

The quality of work is predictable when best practices are followed and they help people adapt to difficult situations.

These best practices are most powerful when properly formalized, whether in writing, etc., and easily accessible.

If service providers can provide employees with a quick reference guide to these best practices, this is the best case scenario.

Ensuring clear communication

Clear communication makes life comfortable. With new technologies and different communication channels, it can be challenging to keep everyone on the same page.

It's easy to get sidetracked and put too much emphasis — and spend too much time — on tasks that don't really matter in the big picture.

Because of this challenge, there are few things to consider:

  • First, will we be communicating via email?
  • Or will we be on online messaging platforms like Slack or Microsoft Teams?
  • Third, we will use some project management software like Trello, Asana or Help Desk software like Milldesk?
  • Finally, how often will we meet? What is the meeting format?

Understanding which channels of communication and interaction are vital, because this understanding keeps people at ease and working together towards goals.

Mutual protection and peace of mind

In addition, service level agreements contain assumptions. With no room for misunderstandings and confusion, the working relationship between a company and its service provider is clear.

Companies have peace of mind with an SLA, service providers too, simple as that.

And it protects both of you in the worst-case scenario. That way, service providers are reassured when they know that the work they do is valuable and leads to a common goal.

Remedies for negatively affected people.

But yes, sometimes things can go wrong, even with the best of intentions, mishaps, noncompliance can occasionally happen.

Everyone may be doing their best to work towards common goals, but some may fall short of expectations.

Service level agreements include solutions based on SLOs (as we mentioned earlier) established for this reason.

If a service provider cannot provide quality service, your customer may request one of the following:

  • Discounts;
  • Service credits and;
  • Fines;
  • Disruption.

Medicines are a protection, even if they are usually not needed.

And ideally, they really aren't used.

Impact on the quality of customer service

The quality of service impact of a Service Level Agreement is undeniable.

Can you imagine the alternative?

Forcing customer service providers to design workflows, set goals without standards, measure work performance, and report on their success can be confusing.

There's no reason to go this route when SLAs are properly crafted.

Also, asking companies to have dedicated service providers doing high quality work without measuring performance is unreasonable.

SLAs aren't perfect, but they provide a framework for work to flow with aligned expectations, set deadlines, and performance monitoring.

To conclude.

Service Level Agreements are the backbone of good working relationships between companies and vendors, the IT department and others.

They don't have to be complicated, they can and should be written in easy-to-understand language.

In fact, the more complicated your service level agreement, the less effective it is. Use simple language that everyone can understand.

The most important thing is that the goals are clear and so are the expectations. Also, you need to be clear about what will happen if poor performance becomes commonplace.

When goals, expectations and solutions are clear, best practices set the table for success.

They also lay the groundwork for a lasting business relationship and a good internal reputation for support/IT.

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Felipe Santos
Felipe Santos is a Cloud and Security Architect, with experience in Windows Server, Cluster, Storages, Backups Veeam and Office 365 environments.



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