Telecom vendors offer a variety of service level agreements (SLAs) with the most common service levels addressing technical integrity and service availability; however, there are many types of service levels that you may encounter or desire when negotiating contracts. For example, operational service levels that address response times for price quotes and implementation timeframes are beneficial when working with carriers and services vendors when frequent order activity is expected. Participation in quarterly business review meetings and meeting reports may also be covered by an engagement SLA. Contract performance SLAs addressing financial performance and invoice accuracy are often common with outsourcing and strategic vendors.
SLAs are intended to guarantee performance commitment by the vendor to the customer for specific technical, operational or financial aspects of the business relationship. SLAs only possess benefit if they contain four key elements: (1) definition, (2) measurement criteria, (3) compliance monitoring and (4) performance remedy. SLA definition and performance remedy are commonly the focal point of contractual provision and they are typically well documented and understood. Measurement criteria and compliance monitoring are the elements of an SLA that define whether or not the SLA has substance, and typically require the most attention from customers after the contract is signed.
Vendors commonly require customers to monitor SLA compliance and report to the vendor out-of-scope or borderline issues. Many SLA remedies are never fully realized by customers if they are not positioned to monitor and report performance to the vendor. Reporting compliance issues to a vendor may be challenging if internal business processes are not structured to efficiently and effectively monitor and report vendor performance. The most equitable solution to this challenge is to contractually bind the vendor to report performance; however, it is essential that internal business processes are established to validate vendor performance reports and to monitor compliance levels to ensure that SLAs yield desired business results.