My 172-page handbook, How to Establish
Service Level Agreements, and my 3 SLA guides are in use
internationally. Here is a detailed
table of contents of the handbook. And here is info on how to get your copy of these publications.
The following articles will help you successfully establish your
SLAs. After you read them, check out these articles on related topics.
Service Level Agreements: Clarifying the Concept
If you want to better manage your customers' expectations, a service level
agreement (SLA) may be worth considering. An SLA is a negotiated agreement
designed to create a common understanding about services, priorities and
responsibilities.
The starting point
Although an SLA is an excellent expectations-managing mechanism,
it's important to manage your own expectations of what it can
realistically accomplish. Unfortunately, some people view an SLA
as a complaint-stifling mechanism or a quick fix to a troubled
relationship; however, using it for such purposes creates more
problems than it solves. Instead, think of an SLA as:
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A communications tool. The value of an agreement
is not just in the final product; the very process of
establishing an SLA helps to open up communications. |
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A conflict-prevention tool. An agreement helps to avoid or
alleviate disputes by providing a shared understanding of needs
and priorities. And if conflicts do occur, they tend to be
resolved more readily and with less gnashing of teeth. |
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A living document. This is one of its most important
benefits. The agreement isn't a dead-end document consigned to
the Forget Forever file. On a predetermined frequency, the
parties to the SLA review the agreement to assess service
adequacy and negotiate adjustments. |
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An objective basis for gauging service effectiveness. An SLA
ensures that both parties use the same criteria to evaluate
service quality. |
Service elements
To be effective, a service level agreement must incorporate two
sets of elements: service elements and management elements. The
service elements clarify services by communicating such things
as:
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the services provided (and perhaps certain services not
provided, if customers might reasonably assume the availability
of such services)
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conditions of service availability |
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service standards, such as the timeframes within
which services will be provided |
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the responsibilities of both parties |
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cost vs. service tradeoffs |
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escalation procedures |
Management elements
The management elements focus on such things as:
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how service effectiveness will be tracked |
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how information about service effectiveness will
be reported and addressed |
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how service-related disagreements will be resolved |
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how the parties will review and revise
the agreement
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When is an agreement not an agreement?
Both service and management elements are necessary if an SLA
is to be effective; yet in many of the SLAs I've reviewed, the
management elements are lacking. The result, typically, is an SLA
that hasn't been functioning as the parties had hoped.
Even with attention to both sets of elements, a successful
agreement requires much more than simply plugging the elements
into an SLA template. The process of planning, establishing, and
implementing an agreement is typically a many-month process of
information-gathering, analyzing, documenting, presenting,
educating, negotiating, and consensus-building – and the
process must involve customers. If customers are not part of the
process, it's not an agreement!
The assumption that creating an SLA is a start-today, done-
tomorrow process is the most common misconception among
participants in my SLA seminars. Before initiating an SLA effort,
be sure you appreciate the effort involved and have both the time
and the know-how to proceed.
Even more importantly, think carefully about whether an SLA is
really what you need. Most organizations can significantly
improve their ability to manage expectations with some relatively
simple service improvements. One such improvement is to create
service standards and to document and communicate them. Having
done so, you are one step closer if you decide to establish an
SLA.
Copyright © 2008 Karten Associates, www.nkarten.com
How Not to Establish an SLA
A service level agreement can be an extremely effective
communications tool for creating a common understanding between
two parties regarding services, expectations, responsibilities
and priorities. However, if it is established at the wrong time,
for the wrong reasons, or in the wrong way, it can create bigger
problems than those it is trying to solve. In presenting seminars
internationally, I've repeatedly met people who needed to rethink
their timing, their reasons or their way.
The wrong time
Service providers sometimes want to create an SLA to suppress
customer complaints; however, attempting to establish an SLA with
complaining customers usually backfires because customers will
see it as just one more thing to complain about. Before engaging
in SLA efforts, the service provider should obtain customer
feedback, seek to understand the complaints, and take some small
but visible steps to resolve the complaints. The timing may then
be better to establish an SLA.
Sometimes it's the complaining customer who initiates the SLA.
Dissatisfied customers may hope to use an SLA as a sledgehammer
with which to bludgeon the service provider whenever service
slips. But just as the service provider won't win customer favor
by using an SLA as a complaint-stopper, neither will the customer
experience service improvements by using the SLA as a club.
Before engaging in SLA efforts, the customer must clearly
communicate the impact of the faulty service and the changes
needed. The customer must also try to appreciate what the service
provider realistically can and cannot accomplish.
When a relationship is plagued by distrust and fingerpointing,
it is not the right time to establish an SLA. First fix the
underlying problems, then establish the SLA.
The wrong reason
An effort is sometimes undertaken to establish an SLA when
something less complex will suffice. For example, in many
companies the division of roles and responsibilities between
offices or departments is vague at best.
A manager at one of my SLA seminars provided a perfect
example. The confusion within his own regional office about who
did what was compounded by the confusion between regions –
including those in other countries. He described a situation of
redundant responsibilities across organizational boundaries, gaps
in responsibilities across geographical boundaries, ambiguous job
descriptions, and roles that changed daily. Sound familiar?
This fellow came to the seminar thinking that an SLA would
solve these problems. By the end, he concluded that what was
needed was not an SLA, but clarification within and between
offices. Since achieving clarity about services, functions and
responsibilities is essential to SLA success, it's a worthwhile
starting point whether or not a full-blown SLA is ultimately
needed. And if clarity solves the immediate problem, investing
the additional effort to develop an SLA may be unnecessary.
The wrong way
Most SLAs are initiated and unilaterally established by service
providers. The customer is given little or no say about either
the content of the SLA or the process by which it is established
or managed. This is the wrong way to be successful with an SLA.
Very simply, if the two parties have not agreed, it's not an
agreement, and it shouldn't be called an agreement. The resulting
document may still serve a useful purpose, but it's not an
agreement.
The very essence of an SLA is that both parties have a say. In
practice, it is rarely practical or feasible for both parties to
be involved in every step of creating the agreement. However, a
successful SLA is one in which the two parties collaborate. When
the process is truly collaborative, the resulting document can be
filed away and largely ignored because the two parties have
already succeeded in learning how to work together. And that's
the right way.
Copyright © 2008 Karten Associates, www.nkarten.com
Key Steps in Establishing a Service Level
Agreement
A service level agreement is an excellent tool for helping two
parties improve communications, manage expectations, clarify
responsibilities and build the foundation for a win-win
relationship. However, establishing an agreement is neither a
quick nor a simple process. Having worked with numerous
organizations internationally on establishing SLAs, I recommend
paying particular attention to the following key steps:
1. Gather background information
Both the customer and the service provider need to start by
gathering information so that each has a solid basis from which
to negotiate. Before eliciting commitments from their service
provider, customers should carefully review and clarify their
service needs and priorities. And before making any commitments
to customers, service providers should examine their service
history and determine the level of service they can realistically
provide. In addition, service providers should assess customer
satisfaction so as to clearly understand customer concerns and
establish a baseline for assessing service improvements.
2. Ensure agreement about the agreement
The two parties to an agreement often have different views about
the role of the SLA and what it can realistically accomplish.
Both sets of views may be valid, yet sufficiently different as to
cause a breakdown in SLA negotiations. Before any SLA development
work is done, it is advisable for the two parties to hold an open
discussion to ensure that they have a basic level of agreement
about the agreement. If they don't – and until they
do – any further SLA effort may prove futile.
3. Establish ground rules for working together
In this critical, but often overlooked, step the SLA developers
(those assigned to negotiate the SLA) focus not on the agreement,
but on the process by which they will work together to create the
agreement. Issues to be discussed include the division of
responsibility for development tasks, scheduling issues and
constraints, and concerns regarding potential impediments. In
addition, the developers can benefit greatly by discussing their
communication styles and preferences. By identifying similarities
and differences right up front, they will be in an excellent
position to minimize conflict.
4. Develop the agreement
This is but one step in the process of establishing an SLA; it's
not the entire process. In this step, the two parties
create a structure for the SLA document and then discuss, debate,
negotiate and, over time, reach agreement about the contents of
the agreement. In doing so, they may each solicit assistance,
input or feedback from others in their own organization. The
duration of this step typically varies from several weeks to
several months, depending on the developers' previous experience
with SLAs, their familiarity with the key elements of an SLA, the
demands of their other responsibilities, and the state of the
relationship between the two organizations.
5. Generate buy-in
The result of Step 4 is a draft of an agreement, not a
completed agreement. Before implementing an SLA, all members of
both parties who have a stake in, or responsibility for, the
success of the agreement should have an opportunity to review the
draft, raise questions, and offer suggestions. Using this
feedback, the developers can conduct further negotiations, gain
the necessary approvals, and finalize the document. In addition
to generating buy-in, this step improves the quality of the final
document.
6. Complete pre-implementation tasks
This step entails the identification and completion of tasks that
must precede SLA implementation. Such tasks might include, for
example, developing tracking mechanisms, establishing reporting
processes, developing procedures for carrying out stated
responsibilities, communicating expectations to staff, providing
pertinent training.
7. Implement and manage the agreement
An agreement that is not managed dies upon implementation.
Management responsibilities include providing a point of contact
for problems related to the agreement, maintaining ongoing
contact with the other party, conducting service reviews,
coordinating and implementing modifications to the SLA, and
assessing and reporting on how the two parties can further
enhance their working relationship.
Copyright © 2008 Karten Associates, www.nkarten.com
How Long Does It Take to Establish an SLA?
One of the questions I'm most frequently asked about service
level agreements is how long they take to establish. Not
surprisingly, the answer is, it depends. A service level
agreement (SLA) is an excellent tool for helping service
providers and their customers improve communications, manage
expectations, clarify responsibilities, and build the foundation
for a win-win relationship, and many factors can influence the
duration of the effort, such as:
- The service environment:
The more services covered by
an SLA, and the more complex these services, the longer it takes
the two parties to discuss, negotiate and document the conditions
of service delivery.
- The proximity of the parties:
Face-to-face negotiation is
crucial in establishing an SLA. However, if travel is needed to enable this
face-to-face contact, it can add significantly to the elapsed time.
- The span of impact of the SLA:
Establishing an SLA between two parties in a home office
generally takes less time than establishing an SLA that spans
regional, national or international boundaries.
- The relationship between the parties:
When the relationship is
characterized by trust and respect, the effort proceeds much more quickly
than when it is marred by distrust and dissatisfaction. In the latter
situation, additional steps may be needed to begin to repair the
relationship before undertaking the more formal SLA process.
- The availability of a model:
The first SLA in an organization
usually takes the longest. Once it is completed and in operation, however,
both the document and the process can serve as a model for subsequent SLAs.
If the first SLA is successful, later ones usually proceed much more
rapidly.
- Prior SLA experience:
The most expeditious SLA efforts are
ones led by SLA developers who have had prior successful experience
establishing an SLA. Conversely, if prior experience is lacking or failed
to result in an effective SLA, the development process often hobbles along.
Given these factors, how long should it take to establish an SLA?
Too short
A misconception about SLAs that I encounter regularly is that they can be
created quickly. Some participants in my SLA seminars arrive under orders
from management to complete one the following week (or last week, as
one recent participant bemoaned). Management mandate notwithstanding,
participants soon understand the impossibility of this task, and face the
challenge of helping their management achieve this same understanding.
Developing an SLA in a week or even a month is both difficult and
inadvisable. It is difficult because of the extensive workload involved in
such tasks as negotiating service standards, establishing tracking
mechanisms, preparing supporting procedures, gaining approvals and
generating buy-in. And it is inadvisable because the process is designed to
help the two parties build the foundation for a strong, successful,
long-term relationship. To rush this process is to sabotage the entire
effort.
Too long
"Too long" refers not to a specific time period, but to an effort that has
stalled and is making no progress. One major contributor to a stalled
effort is a lack of familiarity with the process of establishing an SLA. I
recall one manager who energetically announced that her group and its
customers would have a completed SLA in six months. Yet, after six months
the effort had gone nowhere. She admitted that when they got right down to
it, no one was quite sure what to do first and what to do next.
A second major reason that the effort often stalls is that one or both
parties fail to bring a serious commitment to the effort. When management
refuses to allocate staff to establish the SLA, or the effort is given a
low priority, or one or both parties are unwilling to negotiate in good
faith, progress becomes impossible.
Just right
Establishing an SLA is typically a many-month process of
information-gathering, analyzing, documenting, educating, negotiating,
and consensus-building. I have found 3-6 months to be a good rule of
thumb. When circumstances are optimal, three months is realistic, and
sometimes even less. At the other extreme, if the situation is a complex
one, six months may not be enough. However, if significant progress has not
been made within six months, it's time to stop the effort and examine why.
Copyright © 2008 Karten Associates, www.nkarten.com
Avoiding the "Just-in-Case" Syndrome
In a company I visited to present a seminar on establishing service level agreements, Jeremy, a fellow in the class, told me about his intense frustration in attempting to finalize an SLA with an internal customer.
"How long have you been working on it?" I asked him, thinking he'd say three months, or perhaps six or even eight or nine months. "Oh, about two years," he responded.
Two years?
A penchant for detail-mania
The problem, Jeremy explained, is that every time they got close to declaring the agreement done, someone came up with another detail that needed attention. This back-to-the-drawing-board mindset led to more meetings, more discussions, more mumbling and grumbling, and more opportunity to find yet another detail that needed attention. Needless to say, a service level agreement still being nitpicked after two years stands a good change of never being completed.
In my experience, the driving factor in this type of situation is usually a fear on the part of one or both parties that they will be trapped forever with whatever terms and conditions end up in the agreement. Therefore, before declaring it complete, they'd better anticipate and document every conceivable situation that might ever arise. We'd better be prepared just in case, they tell themselves.
All these just-in-case details create a document that's so bogged down with minutiae that managing it becomes impossible (assuming it's actually completed and implemented). Furthermore, the presence of so much detail fosters a sense of distrust that leads each party to relentlessly watch for departures by the other from what they agreed to.
The role of the change process in a service level agreement
Fortunately, there's no need to anticipate every possible eventuality because a service level agreement is a living document. What this means is that nothing in the agreement is "cast in concrete." Throughout the life of the SLA, changes can be proposed, negotiated and implemented as circumstances warrant.
To ensure that the opportunity to make changes is more than just lip service, it is important to document it in a section in the SLA called the Change Process. This section, one of the management elements of an SLA, provides formal mechanisms for modifying the agreement to address changing needs and priorities.
Even the change process itself can be changed using the Change Process! Sometimes, after making some changes to the SLA, organizations conclude that the process needs adjustment, and so they change the Change Process itself.
Key issues in creating a Change Process include these:
• Conditions warranting change. A well-written SLA describes the types of conditions most likely to warrant consideration of changes, such as changing business or service needs, significant variations from agreed upon service standards, or unanticipated events. Changes might also be considered for such things as adding new services or service standards, modifying service levels, setting new service targets, or adjusting the division of responsibilities.
• Change frequency. To ensure stability of the SLA and to avoid the potential confusion imposed by repeated revisions, changes should be made as infrequently as possible. As a general rule, changes should be incorporated no more often than quarterly.
• Change procedures The SLA should briefly outline the process of requesting, initiating and negotiating changes. Generally, this process entails identifying circumstances warranting consideration of changes, specifying who can submit proposed changes and how they can do so, identifying how negotiations will take place, incorporating the changes into the SLA document, and notifying pertinent personnel about the changes.
Many of the SLAs I've reviewed for clients are missing the Change Process element. I consider this a significant failing. Don't let Jeremy's situation happen to you. Treat your service level agreements as living documents.
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Copyright © 2008 Karten Associates, www.nkarten.com
The Critical Role of SLA Manager
One of the keys to SLA success is that
appropriate people are chosen to oversee the creation and
management of the agreement. Each party to the SLA needs an SLA
Manager who works with the other party's SLA Manager to develop
and manage the agreement. In some organizations, SLA
responsibilities are only one component of the SLA Manager's job;
in other organizations, particularly those with numerous
SLAs, these responsibilities are a full-time job.
Titles of those who oversee SLA activities
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SLA Manager is not necessarily a formal title, although an
increasing number of organizations are using it as a title.
Rather, it's a term that I use to denote the individual who
oversees SLA activities. IT personnel who have attended my SLA
seminar to learn how to create SLAs with their customers have had
such titles as these:
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IT Manager
Customer Service Manager
Client Relations Manager
Business Systems Manager
Director, Network Services
Support Manager
Process Consultant
Sr. Help Desk Analyst
Manager, Service Delivery
Network Support Engineer
Technical Service Manager
Quality Manager
Service Level Manager
Support Services Manager
Project Manager
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Clearly, a wide range of individuals take on SLA responsibilities.
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Scope of the SLA Manager role
For both service providers and their customers, SLA Managers
serve in a multi-faceted capacity that entails being:
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A sales person who can sell the benefits of the
SLA and its terms and conditions to those whose buy-in is
necessary to its success.
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An educator who can help others understand the
purpose of the SLA, its implications, its contents, and how it is
established.
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A negotiator who can work with the other party to
find solutions and approaches that benefit both
organizations.
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A communicator who can keep others informed about
the progress and status of the SLA effort.
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A facilitator who can guide or oversee meetings
and discussions about services and service delivery.
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A conflict manager who can help to resolve
tensions caused by actual or perceived service delivery
problems.
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A detective who can gather data and analyze
service problems so as to identify underlying causes.
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A psychologist who can ease the fears and boost
the confidence of those concerned with how the SLA will affect
them and their work.
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Ideally, the individuals selected to lead the SLA effort should:
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Be knowledgeable about the organizational entity they
represent.
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Be reasonably familiar with the other party's
business.
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Have the respect of both their own and the other party's
organization.
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Be skilled in communications and negotiations.
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Have a strong interest in seeking win-win relationships.
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Be knowledgeable about the establishment and management
of SLAs, or have access to sources of expertise.
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Be able to commit the time and effort needed to establish
and manage the agreement.
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Responsibilities of an SLA Manager
Many organizations complete an agreement, declare it
operational and expect it to function without any further
attention. However, an SLA that is not managed dies upon
implementation. Once an SLA becomes operational, the SLA
Manager's responsibilities may include (but not be limited
to):
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Serving as the point of contact for problems or concerns related
to the SLA itself and the delivery of services described in the
SLA.
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Maintaining ongoing contact with the other party's SLA
Manager.
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Serving as the primary point of contact in the escalation
process.
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Coordinating and implementing modifications to service
delivery and to the SLA itself.
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Periodically assessing the effectiveness of mechanisms
selected for service tracking and reporting.
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Planning and coordinating service reviews.
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Facilitating or participating in conflict resolution
processes regarding service effectiveness.
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Regularly assessing and reporting on how the two parties
can further strengthen their working relationship.
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Delegating responsibilities to, or seeking the assistance
of, colleagues, subordinates or members of the other party's
staff to address issues that may arise under the agreement.
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Planning training designed to foster a heightened service
attitude, create an enhanced awareness of the elements of
high-quality customer service, and provide skills in service
delivery.
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