What is a Service Level Agreement (SLA) ?

The Service Level Agreement is a contract, or a clause within a contract, that outlines the caliber of service a client may hope to receive from his service provider.

It entails a commitment on the part of the supplier to offer its customer(s) a number of services and guarantees.

Thus, a company and an outside service provider will typically come to a service level agreement, or SLA. In the same structure, it might also be between two services.

How a SLA is used ?

The SLA, which is frequently connected to the software industry, as it is crucial for making sure that an IT project is successfully finished. Nevertheless SLA is very common in Key account customer relation, especially in the world of the packaging industry to engage both parties in a clear operational relation.

What is the interest of a SLA ?

In the service level agreement, the needs and expectations of the customer are listed and given official status.

It provides instructions on how services and support project should be carried out.

When properly designed, the SLA allows for a number of things, including:.

• To assist the supplier and avoid miscommunications by giving it a clearer understanding of what its customers are expecting.

• To guarantee the highest level of client satisfaction and service excellence.

• Emphasize the details of the services provided.

• To protect each party from potential newly discovered criteria.

It’s good to know that even though the majority of service providers present their own SLA, it’s crucial that the client carefully reviews it, to ensure that it also serves his best interests.

How to operate a SLA ?

 1/ Regular update

Making sure that your Service Level Agreement is in writing and adhering to it consistently are equally important.

In actuality, it ought never to be seen as a static document.

As opposed to this, the SLA needs to be reviewed on a regular basis and followed as the project develops, especially if:.

• The client requests new business.

• Changes have been made to the project’s technical environment.

• Different approaches are now being used.

Knowing that many companies assess their SLA once a year is a good idea.

When the activity is critical and the business is growing quickly, it is necessary to review its SLA more frequently.

2/ Introduction of KPIs

The SLA must be tracked using IT tools that can issue alerts in the event of a problem.

With the aid of objective definition and KPI implementation, you can also ensure that services are properly managed, adhere to your SLA, assess the quality of the work that has been completed, and follow your SLA.

• Customer Effort Score (CES): This customer satisfaction metric inquires about the caller’s level of effort in obtaining an answer.

• Quality of service rate: the proportion of calls handled to calls presented.

• DIFOT1/DIFOT2: to assess the delivery performance’s timeliness and quality, especially in the world of commodidties (agriculture, ingredients, packaging, …)

To make sure that the systems and processes are operating as intended and that no violations have been committed, a report based on the analysis of these elements must be created on a regular basis.

Conclusion

The SLA, which is not really a legal contract, is essential for organizing the relationship between a service provider and its customers. Especially in B2B where the customer is also a company. For the service provider, the agreement makes it possible to explicitly determine the expectations of the client. Unlike the other contracts presented in the Contract Series section.