SLA in Outsourcing

Outsourcing for business is a perfect way for cost-cutting and delivering solutions to market faster. However, cooperation with an independent company (service provider) may encounter some tricky and not always explicit pitfalls, related to violation of previously defined standards and responsibilities. In order to protect their reputation from being tarnished and denote a strong care about quality of provided services, many companies are steadily going towards the stage of developing their own SLAs. So, why is it so important to have this document in place?

SLA ( Service Level Agreement) is a document that outlines all the aspects of cooperation between a client and a service provider. These aspects can be represented as the expectations for both sides of business relationship that clearly describe targets and objectives.

In general, SLA consists of the following sections:

• Standards to describe the quality of the providing services
• Functions and services to be delivered to the client and their amount
• Description of objects that fall under the scope of maintenance
• Responsiveness criteria (e.g. when dealing with non-standard situations)

These sections can be even more detailed, including different service or quality measurements, according to the client’s business activity area and his requirements. Therefore, the final version of an SLA document should be carefully prepared based on a thorough analysis of the methodologies and processes in order to eliminate any misunderstanding about the terms and conditions.

SLA is not only a “demander” with a list of penalties, but also a bonus “encourager”. Business losses and downtimes can be extremely expensive or even priceless, thus unwanted, so both sides should consider it when setting acceptable periods for solving urgent issues and preventing catastrophic failures. SLA can also define penalties for delayed notifications about the situations that may entail unwanted outcomes. On the contrary, if the service provider is exceeding performance and support standards, SLA may determine some real incentives for that.

IT Svit company is proud of providing an individual approach to its customers, where each SLA is a carefully-crafted masterpiece that holds all the requirements and expectations. This makes our services even more beneficial, as they become clearer and easier to manage from the client-side.

Here is a simple example. Let’s say, there are two separate servers: the former is for live code, the latter is for development. SLA defines three levels of urgency and acceptable responsiveness (i.e. how fast an incident should be resolved) for each server:

• High. Live server: fulfilling requests within 1-6 hours; Development server: fulfilling requests within 6 hours
• Medium. Live server: fulfilling requests within 12 hours; Development server: fulfilling requests within 18 hours
• Low. Live server: fulfilling requests within 24-36 hours; Development server: fulfilling requests within 12-24 hours

When working with SLA, it is important to be precise in key terminology in order to not to tangle clients and prevent these definitions to be interpreted in two ways. For this purpose, ITIL methodological approach is often used.

ITIL is a cohesive set of best practices to establish integration with the organization’s strategy, demonstrate confidence, calculate enhancements, etc. It also brings consistency in key terminology and gives a comprehensive description for each entry. So, there will be no further disputes on how to properly interpret the “incident” term. Full glossary of terms, definitions and abbreviations is available in the ITIL Glossary.

In order to “assign” a priority for each type of request, SLA also defines a so-called Incident Priority Matrix that interconnects those levels of urgency with three levels of potential impact of an issue on IT infrastructure or the whole organization.

This matrix helps to determine the proper level of priority in each particular case, so support team of service provider can can take appropriate measures to resolve issues. Another advantage is that this matrix works as a landmark for a client – he always knows when an issue will be resolved. This brings additional confidence and motivation in partnership.

Considering all of the above, it becomes obvious that SLA plays a vital role in understanding customer’s requirements and needs and monitoring their performance and helps to build strong and successful business relationships.