What is an SLA?
A service-level agreement, or SLA, is a contractual arrangement specifying a service or set of services and the costs associated with them.
When you and a vendor agree to do business together, the SLA:
- Defines the parameters of the service
- Sets the expectations
- Agrees on costs
Sounds simple, right? But SLAs are more than the sum of their parts. An SLA can save you and your vendors from a lot of confusion and dissatisfaction, particularly over time as your relationship ages.
SLAs are key to project management delivery services because they:
- Avoid confusion
Detailing the terms to which both parties agree in a legal document makes everyone aware of the exact expectations.
- Define acceptable quality
This includes specific measurements of the technical quality and overall productivity, so the provided service can be efficiently project managed and accurately judged.
- Pre-negotiate penalties
If out-of-scope downtime occurs, the penalties involved are already defined saving the time associated with the back and forth of coming to terms or strain on the relationship.
- Set boundaries
By fully defining expectations and deliverables, scope creep can be negated or easily fixed.
- Provide security and peace of mind
When unexpected issues can arise at any time, working with a guarantee of service will alleviate your concerns over what happens when they do.
What to look for in an SLA
If you don’t have an SLA standard for your business, your vendor likely does. This, however, does not mean you need to take it at face value. Instead, use it as a starting point. Get your team involved and make adjustments that are favorable to your business.
What should an SLA include?
- A statement of all parties’ intents
- An outline of responsibilities of each party
- Acceptable performance parameters with applicable metrics (defect rates, technical quality, service availability, etc.)
- Expected agreement duration
- Agreed project management responsibilities
- Procedures for monitoring service levels
- A schedule for remediation and penalties
- Problem-resolutions procedures
Here's a sample SLA document that you can edit and use for your business.
In summary, defining and agreeing to SLAs before your project begins helps to set expectations between your team and the project team. Work together with your project services vendor to create SLAs that you can both meet, to ensure the successful completion of your projects.