Today, error or error rates can be useful for measuring quality both internally and with customers. For example, in software tests, you can calculate the error rate per 1000 lines of code. In a contact center, the same metric can be used to measure low-quality interactions based on the total number of customer interactions. Google measures server-side error rates to calculate downtime, which means the service will be considered unavailable if more than 5% of the connectivity requests generated by the server are returned. The SLA should define the overall objectives of the services to be provided. For example, if a third-party vendor`s goal is to improve performance, reduce costs, or provide access to features and/or technologies that cannot be deployed internally, the SLA should state this. This will help the client design service levels to achieve these goals and should leave the service provider in no doubt about what is required and why. For the SLA to have a “bite”, failure to meet service levels must have financial consequences for the service provider. This is most often achieved by adopting a service credit scheme. Essentially, the service provider pays or credits the customer with an agreed amount, which should serve as an incentive to improve performance if the service provider does not meet the agreed performance standards. These service credits can be measured in several ways.
For example, if the 99.5% level for reporting is not met, the SLA could include a service credit that grants a specific price reduction for each performance deviation of 0.5% each week. Alternatively, service credits can be assigned if, for example, three or more errors occur to reach a service level within a certain period of time. Again, each level of service must be considered individually and a reasonable level of credit must be agreed between the service provider and the customer if the agreed level is not reached over a certain period of time. The important thing is to make sure that the service credits are adequate and encourage the service provider to do better, and that they arrive early enough to make a difference. IT outsourcing agreements, where service provider compensation is tied to business outcomes, have gained popularity as companies move away from time- and hardware-based or full-time, employee-based pricing models. In addition to defining performance metrics, an SLA can include a plan to resolve downtime and documentation on how the service provider will compensate customers in the event of a breach of contract. Service credits are a typical remedy. For example, service providers may provide credits that correspond to the length of time they exceeded the SLA performance guarantee. A service provider may limit performance penalties to a maximum amount to limit the risk. Metrics should be designed in such a way that bad behavior is not rewarded by both parties.
For example, if a service level is not met because the customer did not provide timely information, the provider should not be penalized. In addition to this distinction between SLA and SLA, a service level agreement is an important contractual document that defines customer-vendor relationships in the IT world. To better understand this, let`s look at three examples. Any important contract without an associated SLA (reviewed by a lawyer) is likely to be intentionally or accidentally misinterpreted. The SLA protects both parties in the agreement. Many SLAs follow the specifications of the Information Technology Infrastructure Library when applied to IT services. An earn-back is a provision that can be included in the SLA and allows providers to recover service level credits if they work at or above the standard service level for a certain period of time. Earn backs are a response to the standardization and popularity of service-level credits. Here you define the responsibilities of the service provider and the customer.
As a rule, an SLA informs you about the type of services provided, the objectives of both parties (the supplier and the client company), if necessary the requirements and contact persons. .