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4 Benefits of Having a Service Level Agreement

A Service Level Agreement (SLA) functions as a contract between a service provider and the client that defines the expectations of each party. At their most basic, SLAs (Service Level Agreements) are designed to keep both parties on the same page. 

If there is an issue with the service, the SLA acts as vital documentation detailing all the metrics, responsibilities, and expectations that were originally agreed upon. Both parties have access to the SLA, which means that neither may claim that they were unaware of expectations or agreed-upon standards after the fact. 

A reviewed and approved SLA effectively eliminates the possibility of misinterpretation of the contract and provides protection to both the customer and the service provider. Clients enjoy the peace of mind that comes from knowing that they will receive the service they are paying for, and providers have a contract to refer their customers back should they start to demand services that are not included in the agreement.

Table of Contents

What’s Included in an SLA?

-Agreement Summary

Possibly the most important part of the SLA is the summary of the agreement itself. The summary clearly outlines and summarizes the service and the parties involved.

-Points of Contact

The SLA will clearly explain who is responsible for what aspects of the service. This section should detail who is involved and who should be contacted regarding requests, questions, and so on.

-Consequences for Unmet Agreement

The SLA is a legally binding contract, and if the promised service is not delivered, then there will need to be consequences. This section outlines what those consequences are, and what compensation the service recipient can expect in remediation.

Should one of the parties fail to meet the standards outlined in the contract, the SLA will define the consequences—potentially including legal penalties or forms of financial restitution. Clearly defined repercussions help hold both parties accountable.

-Conditions for Cancellation

SLAs aren’t forever—they’re usually designed to apply for a limited amount of time, and there may even be occasions when one or both parties may wish to terminate the SLA and replace it within the contract timeframe. Whether because the SLA isn’t working, circumstances have changed, or the agreed-upon end date has been reached, this section formally established the conditions in which the SLA may be canceled.

4 Benefits of an SLA

An effectively implemented SLA helps manage commitments between service providers and customers to improve the service provider-business partnership. Clients and businesses enjoy more productive and successful relationships, and neither has to worry about the other failing to meet their obligations. At the same time, the right SLA can help assuage the concerns of potential new customers, bringing in new business opportunities and improving the brand reputation.

Additionally, SLAs bring with them several clear advantages, including the following:

1. Improved Customer Experience

Customers who invest in a service provider are taking a risk—they are acting in good faith with the expectation that the provider will be able to meet their needs. The SLA provides these customers with a sort of safety net; knowing that should the provider fail to deliver on the agreed-upon services or otherwise fail to meet obligations, then the customer will have legally binding documentation to assist them in seeking restitution.

By managing expectations and giving customers some much-needed insurance, SLAs can improve the overall customer experience.

2. Improved Employee Experience

The SLA will clearly explain who is responsible for what aspects of the service. This section should detail who is involved and who should be contacted regarding requests, questions, and so on.

3. Established and Trusted Source of Information

In many ways, the SLA acts as a mediating tool, ensuring that everyone’s best interests are being met. It is something that can be trusted by both parties, acting as a source of reliable information relevant to service standards and other guidelines.

4. Increased Productivity and Performance

The metrics established within SLAs offer their own internal advantages. With clear expectations, employees have a clearly defined objective to meet that guides their performance. This leads to improved productivity and increases personal accomplishment.