Understanding service level agreements (SLAs) in managed IT services

Understanding service level agreements (SLAs) in managed IT services

A service level agreement (SLA) is a document that lays the foundation of your relationship with your managed IT services provider (MSP) and determines what they are obligated to do for you when you hire them. While SLAs are legally binding, there is no set standard or enforced regulations on what an SLA must contain, so it is up to you to do the due diligence when offered one by a potential partner.

Let’s learn more about SLAs in managed IT services and what to look for in a good one, so you don’t get stuck with an unfavorable agreement that costs an arm and a leg without a worthwhile return.

What exactly is an SLA?

An SLA with an MSP outlines the specific services, performance expectations, responsibilities, and metrics that govern the delivery of IT services. It sets clear standards and defines the parameters within which the services will be provided. In a nutshell, it lays out what you are getting from your MSP for the money you pay them each month.

However, just as if not more importantly, an SLA also determines what your recourse is when the MSP fails to meet the agreed-upon service expectations. Say, for example, your SLA guarantees 99.9% uptime for your IT network, but you can demonstrate that the MSP did not meet this standard. From there, you can get a discount on the next month's bill or a penalty-free break from your contract, or maybe you have no recourse at all. It all depends on the SLA, so you must read it carefully before signing it to ensure your business is protected.

What should an SLA include?

As mentioned above, there is no industry-wide set of rules that govern SLAs, so MSPs are not required to include anything. But there are several key components that every good managed IT services SLA must have if you want satisfactory ROI while keeping your business protected.

A list of services

The SLA must lay out all the services that the MSP pledges to perform for your business. This should include a comprehensive description of the services that details what's covered and what's excluded, as well as clear boundaries to avoid misunderstandings regarding the services provided. Service limits and disclaimers are normal in this area and are there to ensure that the client does not take advantage of the MSP, but you should still examine them carefully to check whether they’re reasonable.

Key performance indicators (KPIs)

Specific performance indicators, such as uptime, response time, technical issue resolution time, and other relevant KPIs are vital for ensuring the quality of service you receive. These metrics quantify the expected level of service and act as benchmarks for evaluating performance. In other words, KPIs determine the minimum benefits you should be getting for your money and the targets the MSP needs to hit to keep earning it.

Escalation procedures

Inevitably, you will find yourself afflicted by IT problems that are too big to fix over the phone or within the timeframe allotted by the SLA. That’s why the MSP must include escalation procedures that clearly lay out the steps to be taken to involve higher-level support, on-site service technicians, or management to expedite resolution and ensure client satisfaction.

Reporting and communication commitments

To guarantee that the MSP is doing its job and performing up to your standards, an SLA must include rules on the frequency, format, and content of reports and direct communications with leadership. It should detail how and when the service provider will communicate performance reports and other relevant updates to you to foster better transparency and accountability.

Dispute resolution and consequences

The SLA must include what will happen if either party fails to uphold the responsibilities detailed in the contract. However, in the interest of fairness and good faith, it should also include processes for righting any wrongs and resolving disputes. This will foster trust between you and your MSP, and minimize the chances of legal action or a court battle.

A well-crafted SLA is indispensable for creating clear expectations, accountability, and a successful partnership with an MSP. At outsourceIT, we work tirelessly to create an SLA that’s fair for both parties. Give us a call today to see if we’re the right fit for your business.

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