What is SLA and why do organizations and businesses need to establish SLA service quality commitments (Service Level Agreements) for customers?
SLAs are an important component of any outsourcing and technology vendor contract. In addition to category expectations of service type and quality, SLAs provide remedial measures when requirements are not met.
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What are SLAs?
Service Level Agreement (SLA) is simply a document that describes the service level expected by a customer from a provider, with metrics to measure service; and remedies or penalties, if any, when the agreed level cannot be reached. Typically, an SLA is an agreement between a company and an external provider, but it can also be between two departments of a company. For example, a telecommunications company’s SLA might commit to network availability. is 99.999% (calculated every year about 5 minutes 25 seconds loss of life, believe it or not, this time can still be too long for some businesses), and also committed to reduce the percentage of payment charges. payments to customers if the above commitment is not met, usually based on a scale based on the impact of the violations.
Why need SLA
?Commitment and assurance of service quality SLA is the only sustainable way to retain customers, ensure the credibility and seriousness of businesses. It can be said that SLA is the most important competitive driving force and speed today and it is the key to improving labor productivity.
Many banks and large corporations in Vietnam are promoting SLA commitment and see it as a culture, a standard to be achieved, pervasive from the top management to security staff.
The SLA gathers information about all contracted services and their expected reliability into a single document. The SLA outlines metrics, responsibilities, and expectations so that when service issues arise, no party can say no. The SLA ensures that both parties understand the same requirements.
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Any contract of value without an associated SLA (reviewed through an attorney) can easily be misinterpreted, knowingly or unintentionally. SLAs help protect both parties to a contract.
Ideally, the SLA should be aligned with the technology or business objective of the engagement. Deviations can have a negative impact on transaction pricing, service delivery, and customer experience.
Main components of an SLA
?SLA includes components in two areas: service and management.
The service element includes the specifics of what services are provided (and what is not), service availability, standards, and time frames for each service level ( e.g. primary and secondary time amounts may have different service levels), responsibilities of each party, procedures, and cost-service trade-offs.
Governance includes definitions of standards and measurement methods, reporting procedures, content and frequency of reports, dispute resolution processes, an indemnity clause to protect customers from lawsuits third-party reporting for service level violations (this should be included in the contract), and a mechanism for updating the agreement upon request.
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How to implement a model – SLA management solution
?Deploying an SLA model or solution includes the following main parts:
01- Standardizing service lists and SLA commitments on service quality for departments; 02- Standardizing one-stop professional service management processes according to established SLA commitments; 03- Implement a solution to automatically set up the SLA and measure it; 04- Optimization and improvement.