What is a Service Level Agreement (SLA)?
Failed outsourcing projects can cost companies millions. If the project involves outsourcing tech support or customer service, a failed project can also impact customer satisfaction as well. And that can hurt revenues.
So a company can’t afford to have too many outsource failures.
Outsourcing fails often because managers don’t set expectations correctly. When that happens, costs escalate, service delays increase, and quality suffers. Savvy managers set expectations early on in an SLA—the backbone of most successful outsourcing projects. SLAs serve a variety of functions.
In addition to setting expectations, SLAs identify and clarify responsibilities, facilitate communications between provider and outsourcer, and reduce potential conflicts. They also serve as tools for judging providers’ effectiveness.
Key Elements Of A Service Level Agreement (SLA)
Naomi Karten’s book Establishing Service Level Agreements explains the six key elements of an SLA. These include:
- Context setting information
- Description of services
- Service standards
- Service tracking/reporting
- Periodic review
- Change process
The first three elements comprise the key service elements of an SLA. They describe the service context and the terms and conditions of service delivery that you need or expect.
The next three elements comprise the key management elements of an SLA. They describe how service effectiveness will be measured and problems will be resolved. Both sets of elements are critical to an effective SLA.
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Service Level Impacts
If you’re outsourcing tech support or customer service for the first time, make sure your SLA includes these elements
1. Context Setting Information
Context Setting Information “sets the table” for the SLA. It explains the purpose and scope of the agreement, the parties involved, and the agreement’s underlying assumptions.
2. Description Of Services
The Description of Services also helps “set the table’. It discusses the services provided and the services not provided. This helps clarify things in cases where agents might assume the availability of certain services. This section needs to be clear and specific.
3. Service Standards
Including Service Standards ensures that both parties share a common understanding about the conditions under which the stated services will be provided.
4. Service Tracking/Reporting
Service Tracking/Reporting information identifies how service effectiveness will be assessed and communicated. Tracking/reporting information includes a good set of metrics. They should reflect the project’s major objectives.
5. Periodic Review
This section ensures ongoing communication between the two parties and formal systematic attention to service adequacy. When things are going well managers sometimes fail to hold periodic reviews. Hold reviews at the appropriate times even when things are going well.
6. Change Process Of Service Level Agreement
The Change Process section provides a formal tool for modifying the agreement to address changing service needs and priorities. Accordingly, a good SLA provides a mechanism for periodic reviews and modifications as needed.
A Service Level Agreement can include more than these 6 elements. But all effective SLAs include at least these 6 elements.
Help Set Expectations
Including these elements in an SLA can help you set expectations early on. The right set of expectations when outsourcing tech support or customer service helps determine not only the quality of services delivered but also the success or failure of your project.
Keep in mind also that an SLA is a living document. It is often modified as to services, expectations, and responsibilities as circumstances change.
Outsourced call center projects need a detailed, well-thought out SLA to be successful. Getting outsourcing right can help improve customer satisfaction significantly. And that in turn can boost sales and revenues.
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