A service level agreement (SLA) is a contract between vendors and customers that details the standards the vendors are required to achieve. In the context of enterprise networking, it is an agreement between a network service provider and enterprises. Enterprises may subscribe to network services from service providers. These services are often agreed upon and examined in the form of service quality and service availability. A high-quality service level agreement ensures enterprises are protected from network service outages and inconsistencies. It also ensures that service providers and enterprises have a healthy relationship, operating in good faith.
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Benefits of Service Level Agreements
- Business opportunities. Service providers are always being compared to each other. Standout SLAs act as a potent sales tool for service providers. They result in impeccable customer service — strengthening the relationship between enterprises and service providers.
- Formalizing communication. SLAs allow service providers and enterprises to have formal conversations, guided by agreed upon terms. This keeps the provider-customer relationship healthy and impactful.
- Managing expectations. They ensure that customers are truly aware of the service guarantees they are receiving. Ambiguity is avoided. The assumptions a customer may have about the service are debunked. Customers’ expectations are kept realistic and targets are attainable by the service provider.
- A mirror of performance. SLAs can be the difference between a good and a great service provider. A solid SLA provides customers with high-quality services to power their enterprises. On the other hand, a shaky SLA is likely to provide enterprises with inconsistent service availability and quality.
In the current technology landscape, defined by constant evolution, the terms of SLAs keep changing. Therefore a closer eye needs to be kept on service level agreements.
Evolution of enterprise infrastructure
The adoption of cloud and hybrid infrastructures has an impact on SLAs. Enterprises are adopting as-a-service business models, including network-as-a-service (NaaS). These new business models provide opportunities to define terms with service providers. If these new opportunities are not contractually defined or poorly defined, they put the enterprise at risk, including poor quality of service, service outages, and security risks with no consequence to the network vendor.
The complexity of contract negotiation and loopholes
The evolution of enterprise infrastructure is changing the nature of contract negotiations between service providers and enterprises. This impacts the complexity of contract negotiations, resulting in SLAs with confusing and ambiguous clauses. Unethical service providers may use such clauses to draft terms in their favor, at the expense of enterprises. Providers may also use contract templates that omit clauses specifically catering to the protection of enterprises.
Service Level Agreement Best Practices
Align SLAs with enterprise goals
The drafting of SLAs should be approached as a partnership between a service provider and an enterprise. Enterprises should not be cornered or restricted by the terms presented by service providers. SLAs are meant to support the goals of the enterprise.
Ensure SLAs are measurable
SLAs are an agreement of the baseline of acceptable service to be expected by an enterprise. Enterprises should be keen on SLAs that measure performance. It should use metrics that are simple to measure and detail how services are going to be measured.
Review and amend SLAs occasionally
New services are constantly being realized, many of which may affect service quality, availability, cost, and response, and resolution time. It is important to examine SLAs from time to time to ensure that your enterprise and the service provider are still aligned. This also ensures that you continue getting maximum value from the evolving terms.
Have SLAs cater for exceptions
SLAs should cover where they do and do not apply. For example, an hour of service unavailability every month to allow the service provider to carry out maintenance should be clearly stated. It should also detail how the resources of an enterprise, such as data, are protected during such outages. Consider situations such as natural disasters that may cause service outages. The SLA should provide the scope and plan to approach potential disasters.
What You Should Look for in SLAs
A well-drafted service level agreement not only has clauses on response time, but also resolution time. The response time is how long it takes a network service provider to respond to an incident. Resolution time provides a commitment to resolve an issue within a specific period. Service providers may omit resolution time because failures tend to be unpredictable. An issue may take anywhere between minutes to days to fix in severe situations. As an enterprise, it is important to ensure resolution time is stipulated to safeguard against service unavailability without the provider being held liable.
The responsibilities of both parties should be clearly outlined. This eliminates the possibility of confusion and loopholes on both sides. A service provider should have all of their responsibilities presented in great detail. The scope of the services to be offered should be clearly defined to understand what they can and cannot do. This helps ensure a healthy relationship between providers and clients.
Consequences of breach of contract
A tight service SLA highlights the penalties of a breach of contract between both parties. This builds upon the responsibilities of each party. These penalties are often placed upon service availability and service quality. An enterprise should be protected by clauses that outline the consequences of a provider’s breach of contract.
Clause of indemnification
A network service provider is required to compensate an enterprise in the event that warranties are violated. The service provider incurs liability under the indemnity. It is also difficult for service providers to defend themselves against such claims.
Service level agreement measurement
Not all SLAs provide 24-hour cover. It is common to find SLAs that apply only during standard working hours. As an enterprise, it is important to make sure that you are satisfied with the coverage of your SLA. This helps to avoid incidents outside of the coverage of your SLA.
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