With clearly defined penalties, the customer feels properly compensated and dissatisfaction is contained. Compensation also becomes an important KPI for the supplier to measure the performance and productivity of his team. This helps them improve service delivery, retain existing customers, and get new referrals. Depending on the service, the types of metrics to be monitored may include: service availability: the time available for the use of the service. This can be measured on the basis of the window of opportunity, for example between the hours of 8.m and 6 P.m. an availability of 99.5% and an availability of more or less at other times. E-commerce operations usually have extremely aggressive SLAs at all times; 99.999 percent uptime is a non-unusual condition for a site that generates millions of dollars an hour. These systems and processes are often controlled by specialized third-party companies. If this is the case, it is necessary that the third party is also involved in the AAA negotiations.

This gives them details of the service levels to be followed and explanations on how to track them. SLAs are an integral part of an IT provider contract. An SLA gathers information on all contractual services and their expected reliability in a single document. They clearly state metrics, responsibilities, and expectations, so that no party can invoke ignorance in case of problems with the service. It ensures that both parties have the same understanding of the requirements. Professional Advice: It is common industry practice for a company to transfer a portion of the penalty to the service team. This prevents the service team from relaxing and benefiting both parties. Service Credit: This is another form of penalty, which involves compensation in the form of service credits or extension in the service. For example, if the service provider does not respect the hours worked during a month. The deficit will be offset in the following months. This is often observed in software development, application maintenance, software or hardware testing services, etc.

It is important to mention that companies must be practical and not too ambitious in the creation of these SLAs. Ad compliance with a strict SLA is costly and a low one will have a negative impact on the level of service. It is important to have neutral and practical conditions that are acceptable to both parties. The service elements include the particularities of the services provided (and what is excluded if there is reason to doubt), the conditions of availability of the service, standards such as the window of opportunity for each level of service (for example, prime time and non-prime time may have different levels of service), the responsibilities of each party, escalation procedures and cost/service trade-offs. Professional advice: When sharing a call for tenders, the client must clearly define the expected service levels. This will help filter out suppliers who lack skills, for example. B multilingual staff or 24/7 coverage. Disclosing the minimum required level of service in advance saves both parties time and effort. Before subscribing to an IT department, the SLA must be carefully evaluated and designed to achieve maximum service value from the perspective of end users and the business. Service providers should be mindful of the differences between in-house production and customer-oriented results, as they can help set service expectations. An SLA or service level agreement is a written agreement that sets standards for support – in short, an after-sales service guarantee.

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