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A Service Level Agreement (SLA) is an agreement or contract between an organization and their service provider that details the obligations and expectations of the relationship. Working with a service provider has many benefits, but to get the most out of this relationship an SLA should be put in place. The SLA functions as a blueprint of the service the provider will provide ,and can protect your organization's assets and reputation. Below we’ve provided 3 reasons why your organization should have an SLA with their provider.

1. Sets Clear and Measurable Guidelines

An SLA is key to ensure you and your service provider are on the same page in terms of standards and service. Through creating a service level agreement, you and your provider can work through your expectations and ensure you’re on the same page. Establishing clear and measurable guidelines is important as it reduces the chances of disappointing the client and provides the client with recourse if obligations aren’t met.

 

2. Provides Recourse for Unmet Service Obligations

If your service provider fails to meet their obligations, there can be significant consequences for your organization's reputation and bottom line. In your SLA, you should include consequences if performance standards are not met. These monetary penalties may be able to assist your organization if losses are incurred. It also protects your organization and holds your provider accountable.

 

3. Provides Peace of Mind

An SLA can provide peace of mind to the client. They have a contract they can refer to that allows them to hold their service provider accountable and details exactly the type of service they expect. If agreed upon needs aren’t met, they can mitigate some of the impacts by monetary compensation through their provider. For some organizations, this may provide peace of mind and assurance.

 

Conclusion

An SLA is key in protecting your organization and ensures you have a successful relationship with your provider. Mutual understanding in terms of performance standards are important to establish a positive experience for all involved parties. Any service provider you choose should be more than happy to create an SLA with you. However, having an SLA isn’t enough. Always remember to review the contract as your business grows or changes. Your needs may change over time and your SLA should always reflect your organization's evolving needs.

 

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