Service Level Agreements (SLA): A Simple Guide to Understanding Them

SERVICE LEVEL AGREEMENTS | 5 MIN READ

Cyber security has been an increasing concern for most businesses. Hackers aren't going away anytime soon and it would seem that no one is safe (Equifax, Target, Facebook, etc.).

The solution for many is to seek the assistance of a managed IT services provider (MSP), and if you join the masses in protecting your business, you will need to sign a service level agreement. SLAs are critical components of your service contract, but what is a service level agreement?

Not a lot of time? Here is what we will cover in this articles:

What is a service level agreement?
What should you look for in your service level agreement?
Why are service level agreements important?

What is a service level agreement?

A service level agreement (SLA) is a contract provided by a managed service provider (MSP) that defines the level of service that is expected by the customer.

RELATED: What is a Managed Service Provider?

Normally, an SLA is between a company and third-party provider being hired to manage a service, but sometimes, they are used between departments. Typically, this is only the case in very large companies that may be dealing with several branches.

The goal of this agreement should be to mutually protect the customer and provider, as it manages expectations and solidifies what is agreed upon, upfront.

It's important to note that a service level agreement is specifically to define what a customer can expect with their service (expectations), but does not serve the purpose of specifying how the service will be implemented.

What should you look for in a service level agreement?

Uptime

• Make sure there is a written understanding regarding uptime. It's unreasonable to assume that there will never be an outage, but, there should be an expectation of when you will be back online, should an outage occur.

Response Time

• The minimum response time that is expected for a support request. This should cover remote/call-ins, as well as onsite support.

Back-up and Disaster Recovery

• Any serious MSP will offer data back-up and disaster recovery, but there are some specifics that should be included in your SLA to make sure you are protected:
  • How often your data is backed-up. Hourly is common, but depending on your needs, data can be backed-up as often as every 5 minutes.
  • How often servers are tested (industry standard is daily)
  • How often you receive off-site back-up (industry standard is daily)
  • How long should your information be stored? (MSPs will have a pre-determined length of time to store your data unless you specify something different)

Data Monitoring

• Your MSP will have access to most (if not all) of your company data because they will control your network. Even though this can sound scary, the reality is that giving them access to your entire network is a necessity for them to work efficiently. Make sure you understand who will have access to this data and how it will be collected.

• It's important to understand how often you will have access to performance measurements. If an annual or quarterly review isn't enough for you, that is something you can negotiate.

Support Procedure

• As silly as it may sound, you need to make sure your SLA spells out how to report an issue of your hardware or network to your provider. This is a loophole that is often overlooked and can get your MSP off-the-hook for poor service if they fail to meet other criteria in the agreement if you didn't place the call in the correct manner.

Consequences for failed SLA requirement

• Each MSP will have a policy for this, however, this may be negotiable. Some providers will include a credit or reimbursement to customers if an expectation listed in the SLA is not met.
• Make sure to include an escape clause for instances where services are consistently not met. The last thing you want is for your network to be held hostage because you didn't insist on an escape clause. This is reasonable and expected for most SLAs.

Why are service level agreements important?

Metrics will vary from provider to provider, but the goals of a service level agreement are the same. To provide expectations that you can expect and the provider can achieve.

The goals will be generally based on the amount/timeliness and quality of the work provided. Your document should prioritize areas of importance, services expected, and assurances for if expectations aren't met.

The importance of a service level agreement comes down to protecting your company and establishing a minimum threshold to be met.

Your company having proper network security and uptime shouldn't be negotiable. Businesses need quality IT support through a managed IT services provider, but the reality is that paying for in-house or third-party support can be pricey (though not as pricey as downtime).

RELATED: What is Downtime Cost?

The expense of supporting your network properly is fairly high, so, make sure you're protected when you sign your contract by ensuring your service level agreement says what is needed to satisfy your expectations.

If you have additional questions you'd like answered, feel free to reach out to us. We have been helping others for over 50 years and are happy to do so for your business, as well!

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