Service Level Agreements (SLA’s) are a critical component of any vendor contract. Beyond listing expectations of service type and quality, an SLA provides remedies when requirements aren’t met.

Effective SLA’s are extremely important to ensure effective (out-) sourcing engagements. The metrics used to measure and manage performance to SLA commitments are the heart of a successful agreement and are a critical factor in long-term success. Lack of experience in the use and implementation of performance metrics can cause problems for many organizations as they attempt to formulate their SLA strategies and select and set the metrics needed to support those strategies. Fortunately, while reaching for perfection is difficult and costly, most companies can achieve their objectives through a carefully chosen set of collected metrics.

The basic components are a statement of the parties’ intent, an outline of the responsibilities of each party (including acceptable performance parameters with applicable metrics), a statement on the expected duration of the agreement, a description of the applications and services covered by the agreement, procedures for monitoring the service levels, a schedule for remediation of outages and associated penalties, and problem-resolution procedures.

Procurement Academy’s new E-learning course on SLA’s will:

  • Teach learners how to define SLA’s and their components.
  • Explain how to evaluate supplier SLA’s.
  • Provide practical guidelines on using SLA’s to improve performance