Follow These 8 Steps To Create A Practical SLA

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Practical SLA

Thinking about call center outsourcing services or tech support or Outsourced customer service? A key stage in implementing outsourcing is developing a comprehensive, yet practical SLA (service level agreement).

Creating a Practical SLA does several key things:

  • ✓ Sets realistic expectations for your service provider
  • ✓ Tells the provider what’s important to you and your customers
  • ✓ Indicates how your provider should spend its time.
  • ✓ Tells your provider how you will judge its performance
  • ✓ States clearly the responsibilities of both parties
  • ✓ Puts both parties on the same page

In addition, creating an SLA provides a solid foundation upon which to build a productive partnership with your service provider. But creating an SLA that does everything you want it to isn’t always easy—especially if you’re new to outsourcing.

8 Steps to Building an Effective & Practical SLA

If you’ve never created one or the SLAs you created weren’t effective, this post can serve as a guide to developing a good SLA.

1. Assess The Current Situation

Review the current situation. Ask yourself if the service you’re providing is enough to satisfy customer expectations. If it is, then you may only need to “tweak” this service to boost customer service beyond expectations. If it’s not, then you need to create a realistic plan for achieving the level of service that will boost customer service beyond expectations. Base the plan on feedback from your employees and your customers.

2. Define The Level Of Service

Include things like the scope of service needed, the purpose of the service, and all key information as well as the specific business processes. Also include the impact of service loss, so the provider gets a sense of what’s at stake.

3. Define The Terms Of The Agreement

Having defined the service levels, define the provider’s roles and responsibilities and its duties, the agreement’s duration, and the applicable service times. You’ll also want to define the exceptions to the service times, such as holidays, maintenance periods, and so on. Defining the exceptions is critical to judging a provider’s performance.

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4. Set Performance Levels While Creating Practical SLA

Make sure you include both the minimum AND the expected levels for service, as well as many times the service is considered either unavailable or limited. Here the “expected level” is what the customer is paying for while the “minimum level” is what the customer would consider poor—that is, borderline unacceptable service.

5. Record Escalation Procedures

Having set service standards, indicate the steps to be taken when service levels fall below these standards. These steps should include two things: (1) the reason for missed activities and (2) the reporting time and the problem resolution within a specified time.

6. Define The Project’s Metrics

The key to defining metrics is using ones that can be easily tracked and fit the situation. Metrics commonly used include:

  • ✓ Mean time between failures (MTBF)
  • ✓ Mean time between service incidents (MTBSI)
  • ✓ Meantime to restore service (MTRS)
  • ✓ Turn around time
  • ✓ Uptime

You may also want to include time-to-restore service, the time service is considered to be unavailable, availability and reliability targets, and maintenance downtime.

7. State Conditions And Fees

State both the conditions and fees (if any) clearly. Also, state the exact circumstances under which the fees may apply as well as any exceptions. The clearer these statements are the less chance for disagreement and the better the provider’s performance.

8. State Practical SLA Exclusions

Provide a list of exclusions in which time is not enforced against the SLA measurement, such as scheduled and emergency maintenance, and equipment re-boots and backups. Also, include in the SLA provisions for the failure of a third party that the provider has no control over.


This is also a good place to state when the “system is down”—technically, any time that the service is deemed unusable by customers. Developing a comprehensive yet practical SLA is a key step in implementing an outsourcing project that succeeds. It sets realistic expectations for your service provider and shows the provider what’s critical to you and your customers. More important, an effective yet practical SLA tells the provider what the expected service levels are and how its performance will be judged. That’s the key to getting the most out of both a service provider and an outsourcing project.

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