What are the key components of a good SLA?
An SLA includes all common components of any legal agreement. List of parties, start and end date, inclusions, exclusions, non-performance penalties, remedial measures, etc. Let's look at some of the relevant components.
Nature of Service:
- A comprehensive Service Level Agreement must carry a detailed description of all services offered by the provider to the business. These should be divided into categories & sub-categories. If some services are specific to a department, then it should be mentioned. Hours of operations & resolution times are important components for any IT Services business, and these should be explicitly mentioned leaving no scope for ambiguity. Both vendors and partners must also mention application & license ownership to steer clear of any conflicts
Key Performance Indicators (KPI):
- An important aspect of any SLA is how the provider's performance is measured. It should clearly mention the KPIs for the evaluation of service levels.
- Risks to individual processes & risk ownership must be clearly mentioned in the SLA.
- This is another very important component. Both parties must agree on all the exclusions.
- Reporting is a time-consuming process and there is a cost associated with it. Clearly mention the type of reports & frequency of submissions of each of these reports. It should also mention the cost of additional reporting which may be demanded by the client from time to time.
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