What Should be Include in Managed Services SLA?
What are Service Level Agreements or SLAs?
An SLA is an agreement between a client organization and a Managed Services Provider(MSP). At its most fundamental level, the contract spells out both the client services required and the MSP’s expected level of performance. A great MSP helps you define your service expectations.
After the client company defines its needs and required service expectations, the Managed Service Providers will start drafting the SLA. The service expectations are the foundation of the SLA. Next, you’ll define the components of your SLA. SLAs should be aligned to the technology or business objectives of an engagement. Finally, let’s break down what’s inside a good SLA. Knowing what’s inside the agreement gives you the confidence to receive the level of service your business requires.
Agreement & Service Description
The service level agreement is where the client organization and MSP document the agreed-upon terms and conditions.
Further, the client organization and MSP develop a list of all acronyms relevant to the specific client situation. Additionally, the SLA defines what’s included in the services the client purchases from the MSP.
The services provided to the client are clearly spelled out with quantitative metrics for performance. Subsequently, the agreement makes the responsibilities of both the MSP and the client clear.
Availability & Responsiveness
Outages or service-affecting incidents are defined along with what the reporting and response process is if an outage occurs. For Network monitoring services, it is common to use percentage goals such as 99.99% network uptime for a year. Service availability includes database accessibility, data center resources, and network uptime. Additionally, Service Level Agreements may also consider scheduled maintenance and other known factors. Finally, your MSP will have a monitoring system to measure uptime and other metrics included in your SLA.
Responsiveness measures how fast the MSP responds to the initial call/chat/email/ticket and performs the services required to close the incident. To receive timely service, the customer will also have their responsibilities detailed for how to report issues, etc., in the service agreement.
Procedures for Reporting Problems
Make sure that the following items are spelled out in detail.
- Who does the client company contact?
- How does the client initiate contact?
- Portal/ticketing system
- Phone call
- Chat
What are the escalation procedures? You and your MSP will agree on how more complex incidents escalate to more senior technical staff. Further, the SLA will detail different types of problem severity and the response times for each type of incident.
As an example, the resolution time in an SLA across four severity levels looks like this:
| Priority | Priority Definition | Resolution SLA |
|---|---|---|
| P1 (Critical) |
|
4 Hours |
| P2 (High) |
|
8 Hours |
| P3 (Medium) |
|
24 Hours |
| P4 (Low) |
|
48 Hours |
Monitoring and Reporting
Now that most of the SLAs are developed, we need a way to measure what is happening that may affect your SLA.
Items to include:
- Data to collect and how often
- Types of reports generated
- Types of reports the client can access
Consequences for not meeting service Obligations
The SLA will spell out metrics and penalties for each service included in the SLA. Your MSP will specify under what conditions your firm will receive a credit against your monthly charges for an SLA “violation.” Monthly service credit is the most common type of remediation. In rare cases, there may be a refund. Finally, your SLA may also include termination options.
Service Credit in SLA
Service Credit in service Level Agreement (SLA) is a contract between two parties where one party agrees to provide a certain level of performance for a fee. The other party agrees to pay the first party a penalty if the agreed-upon level of performance is not met.
Escape Clauses or Constraints
Certain conditions may exempt the MSP from the terms of the SLA; conditions like a force Majeure may excuse the MSP from the penalties specified in the SLA if service drops below a defined threshold. This is where you’ll detail other exclusions and how to handle third-party claims.
SLAs: The Bottom Line
In summary, SLAs provide one of the essential items in the service provider-client relationship. SLAs set expectations! When you sign the contract, both parties to the agreement know what to expect. If this is the first engagement between the client and the MSP, the initial SLA can set the foundations for mutual success.
Initially, perhaps only a certain amount of IT infrastructure or functions can be included in the agreement with the opportunity for growth. As the relationship progresses, the MSP can take on more of the client’s IT functions. This is how the SLA is the foundation for success.
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