What SLA Is And Why Businesses Need It
SLA might not be a strange term for businesses, especially those working in the IT industry. Nowadays, SLA is increasingly applied at more organizations for various processes and becomes a powerful component of any vendor contract to protect both parties and minimize misunderstandings. This article will provide a deep dive into what SLA is and specify why it is much needed.
What is SLA?
SLA, or Service Level Agreement, is a contract specifying the customer's expectations towards the provider's service level. In detail, SLA lists out all the metrics to measure the services and the solution or penalties if the agreed levels are not achieved. A simple example of a SLA is the bank’s commitment to keep the ATM cash withdrawal transaction under 10 seconds.
Typically, SLAs are set up between businesses, but different departments within an organization can also use SLAs.
The key components of an SLA
Every SLA is different, but most of them share the same sections to cover all areas of partnership as follows:
- Services specifies what benefits the vendor can offer. It also contains service availability conditions, each parties' duties, as well as cost/ service tradeoffs.
- Measurement includes the metrics to measure service commitment, including KPI (key performance indicators), performance measuring methods, specific standards, reporting details, etc.
- Intervals defines the renegotiation intervals and agreement duration.
- Obligations lists out some obligations for both parties to make sure the agreement is enforced.
- Penalties details the solution for failure to meet the obligations listed above.
Why are SLAs important?
As mentioned, SLAs are crucial to any vendor contract and even to a business to ensure its employees can perform to the desired productivity levels. With clearly stated metrics, expectations, and obligations, SLAs help both sides stay on the same page and avoid requirement misunderstandings.
For customers, specifically, SLAs help them know precisely about the services they will receive. The agreements are a powerful assurance for any clients when working with a new vendor, because they can exercise their right and receive compensation if obligations are missed.
For service providers, SLAs can be a great way of branding. In other words, the vendors can detail how they can ensure the service's high quality, thereby building trust and creating new business opportunities.
For businesses, setting up an SLA between departments helps develop a smooth workflow and minimizes the risk of missing deadlines. The overall performance of the organization, therefore, is leveraged, and the service/ product quality is improved. SLAs are helpful to manage the workforce, especially when remote working has become a thing today, making sure that everyone is working to the best of their capabilities and gets timely support.
How to manage SLAs?
Monitoring and reporting on SLAs manually can be a burden for the business, as they have to keep a close eye on every metric and every employee. That's when SLA management solutions come into play.
TimeKeeper is the first SLA management solution for enterprises in Vietnam. The solution helps monitor business service quality and efficiency, contributing to the high satisfaction of both customers and employees while enhancing business credibility.
- TimeKeeper allows businesses to customize metric framework for each process and offers comprehensive management with 3-level tracking (from steps to workflow and process).
- It is installed on employees' PC, reporting in real-time any issues that may occur for timely actions.
- The tool offers reports displayed in the dashboard, giving a broad view of how the business is doing, which is important for leaders to develop better plans and optimize the business processes.
- This solution also provides transparency in evaluation by automatically compiling a list of top performers in the organization, motivating employees to perform even better.
In this competitive business world, SLAs are crucial for businesses to gain competitive advantages and increase partnership values. With the support from SLA monitoring tools, like TimeKeeper, businesses can improve productivity, deliver higher service quality and achieve further success. To learn more about TimeKeeper, and explore how this solution can benefit your business, try it for free now.