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How to Select an SLA: Consider these six tips before signing on the dotted line

Created: 09 Aug 2011 • Updated: 09 Aug 2011
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A good service level agreement (SLA) can be an effective tool for helping SaaS providers and customers manage expectations, clarify responsibilities, and objectively assess service effectiveness. If well-defined, an SLA will clearly identify the performance metrics and expectations that guarantee the service.  In some cases, SLAs may offer vague metrics, loose definitions and incomplete information that can be open to misinterpretation.

As you consider your technology investment, keep these important considerations in mind: 

  • Put it on the wish list – Many organizations purchase technology without considering an SLA or they make it an afterthought. Make sure SLAs are included as part of your search for the right solution and are discussed up front during the decision-making process. The SLA may just be among the differentiators.
  • Look for SLAs that fit your business – One size doesn’t fit all and no one SLA is right for everyone. Look for vendors you feel are a good match for your goals and business objectives.
  • It takes two to tango – Most SLAs include a description of services and their expected service levels, but where some SLAs fall short is with providing metrics that clearly define the terms of the SLA. Metrics should clearly outline the expectations, remedies and penalties for failure to perform.
  • Plan for moving day – If your SLA is with a small provider, be aware that a merger or acquisition could change your agreement. Never assume that everything will continue as normal if a new company takes over. Be prepared to re-negotiate your agreement if necessary.
  • Keep it simple – SLAs can track almost anything, but a good rule of thumb is to keep things simple. Adding too much complexity to your SLA can cause confusion and run up costs on both sides. Examine what outcomes are most important to your operation and identify clear metrics to track those results. Remember, the more complex the monitoring, the less likely it is to be effective.
  • Look for Transparency – Services that are backed by SLAs, the results of which are measured and published on a regular basis, build trust between the vendor and the customer. When the vendor can back their SLAs with a money-back remedy, consider it the icing on the cake.

In summary, an SLA is a critical part of any provider agreement, and it will pay off long-term if the SLA is properly defined at the beginning of a relationship. It protects both parties, and should a dispute arise, will specify remedies and avoid misunderstandings –saving considerable time and money for both you and your provider.

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