8 BEST PRACTICES
VENDOR SERVICE LEVEL AGREEMENT
WHAT IS AN SLA?
A service level agreement, or commonly
shortened to SLA, is a key component of every
contractual relationship with your third parties to
maintain a certain level of performance.
An SLA is a documented
agreement that establishes
expectations between the
customer and service
provider/vendor.
8 SLA BEST PRACTICES
Here are a few SLA best practices to be aware of:
2 Agree on specific standards.
1 Make sure the SLA is
very straightforward.
Your SLAs should be
written in layman’s
terms, yet contain
enough detail so that
your organization and
the third party know
what is expected.
8 Review SLAs to ensure the
vendor is providing what you
expect and/or requested.
It’s also a good practice to
review early on that the items
you receive from the vendor are
precisely what you’ve
requested. Keep your eye on
the SLAs throughout the
process. Each time you receive
a report, take a couple of
moments to make sure the
vendor is actually performing
as expected.
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TAILORING VENDOR SLAS
Ideally, SLAs will be tailored to the products and
WRITING VENDOR SLAS services the third party is providing. As you’re doing
your vendor due diligence, you should make notes of
things that you’ll need to see follow-up documentation
Who Is Involved in Drafting?
on and items where you’ll want ongoing reporting or
An SLA should be developed between all parties perhaps standards of conduct you need the vendor to
involved — typically your organization and the third ascribe to. All of these will help you determine what
party. You'll often see business managers, vendor sort of SLA language to include.
managers and legal teams providing their feedback.
Some SLA examples by vendor type are:
It's important that everyone works together to ensure
its not only comprehensive, but also accurate and
consistent with risk management practices.
What Is Included Within?
Core processor: Call center: reporting
The SLA includes the products or services to be
delivered, responsibilities and contacts, timing and
reporting on accuracy, on speed of answer
availability and technical and call abandon rates
frequency and metrics by which to measure, monitor
response time
and approve process effectiveness.
The information dictated in the SLA will vary heavily
based on the product or service provided, but a SLA
is very crucial.
3 Decide how the SLAs will be measured.
This means determining how frequently, what type of metrics
and what kind of reports will be provided to your
Work with your team to decide management team. Request that robust reporting be
what the specific standards are. developed and sent without needing reminders. While it’s
Whether it’s system uptime, your responsibility to track and analyze the reports provided,
reliability or speed of answer, you shouldn’t need to go and ask for them each time.
they should be consistent and
specific across the board.
4 Identify the appropriate
point person.
This goes for each side of
the relationship, as well as
an escalation or alternate
person if the point person
is unavailable.
5 Consider procedures for
dispute resolution.
Make sure there are pre-agreed
upon procedures on how to
handle disputes in any portion of
6 Ensure provisions for the relationship – such as
7 Don’t forget about change management. situations in which vendors aren’t
non-compliance and Consider factors that meeting a particular standard as
termination provisions. may allow for any well as scenarios where the
You’ll want to be sure that number of changes, vendor disagrees on this
there are clear terms around such as shifts in the evaluation. Also, consider how
SLA non-compliance, team, terms of the disputes will be resolved and
escalation procedures or any agreement or in disaster ownership/processes for
behaviors that could ultimately circumstances which complaint management.
lead to the termination of the may waive the SLA
relationship. altogether.
SLAs are a powerful tool to help manage
the vendor relationship, but it's important
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that everyone on both teams (your
organization's team and the vendor's team)
are clear on both their role as well as PRINTABLE VERSION
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