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6 do’s and don’ts for crafting more effective SLAs
SLA adherence is no guarantee of outsourcing success. Here’s how to avoid seeing red when all the lights on the service delivery dashboard are green.
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Service level agreements, or SLAs, are a crucial part of outsourcing contracts and help shape delivery reporting over the course of the IT service agreement. Here are some tips on what to do and what not to do when crafting your SLA.
Use common sense when crafting SLAs
Avoid using too many metrics or duplicating metrics. In the end, it just creates more work for everyone involved. Focus on metrics that make sense and that matter most to the organization.
Don’t view financial penalties as cost savers
SLAs typically include service fees in case something goes wrong or changes. But these can quickly add up, especially if credits are offered for poor performance. These fees should encourage better service from providers instead of being seen as a cost saver.
Consider pushing back on ‘earn back clauses’
An earn back clause lets outsourcing providers avoid paying a service level credit if a performance metric is met later than expected. But companies are starting to push back on these clauses, since the general consensus is that performance can’t be earned back once it’s lost.
Do be precise
Make sure your SLAs are precise and quantitative. You want to include clear details about what is being measured, how you’re evaluating performance and if there are any exclusions or exemptions.
Do adjust SLAs over time
SLAs don’t have to remain stagnant, you can change and evolve the metrics as you go. Eventually, a metric might become redundant or new technologies like AI might introduce new metrics. Revisit your SLAs throughout the contract to make adjustments as needed.
Don’t view SLA adherence as a guaranteed success
SLAs won’t automatically drive performance, but if you take the time to create thoughtful SLAs, they will naturally be more successful. However, it’s up to IT leaders to monitor benchmarks and act on any performance issues.
SLAs don’t have to make outsourcing contracts difficult as long as you have the right metrics and stay focused on results.
Use common sense when crafting SLAs
Avoid using too many metrics or duplicating metrics. In the end, it just creates more work for everyone involved. Focus on metrics that make sense and that matter most to the organization.
Don’t view financial penalties as cost savers
SLAs typically include service fees in case something goes wrong or changes. But these can quickly add up, especially if credits are offered for poor performance. These fees should encourage better service from providers instead of being seen as a cost saver.
Consider pushing back on ‘earn back clauses’
An earn back clause lets outsourcing providers avoid paying a service level credit if a performance metric is met later than expected. But companies are starting to push back on these clauses, since the general consensus is that performance can’t be earned back once it’s lost.
Do be precise
Make sure your SLAs are precise and quantitative. You want to include clear details about what is being measured, how you’re evaluating performance and if there are any exclusions or exemptions.
Do adjust SLAs over time
SLAs don’t have to remain stagnant, you can change and evolve the metrics as you go. Eventually, a metric might become redundant or new technologies like AI might introduce new metrics. Revisit your SLAs throughout the contract to make adjustments as needed.
Don’t view SLA adherence as a guaranteed success
SLAs won’t automatically drive performance, but if you take the time to create thoughtful SLAs, they will naturally be more successful. However, it’s up to IT leaders to monitor benchmarks and act on any performance issues.
SLAs don’t have to make outsourcing contracts difficult as long as you have the right metrics and stay focused on results.
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