Managed IT Service Level Agreements (SLA) – What Should You Expect?
Every good business owner knows or should know, that creating value for the customer is key to success and longevity. As a leading provider of IT support in London, Micro Pro is held accountable for the value we provide customers through our managed IT service level agreement (SLA).
However, not all SLAs are equal. There is no official industry standard that all IT support service providers must adhere to. SLAs are fundamentally determined by the managed service provider (MSP).
That being said, it’s within the best interests of business owners to determine whether the outsourced IT service provider you are considering entering into a contract with is likely to deliver a satisfactory service.
Examining the SLA is often an indicator of the quality of service you can expect from a company. This is the document that holds IT support providers, to their word and is your leverage for them to deliver on their promise.
So what information should you expect to find in an IT service level agreement that reassures you the company provides a high-value service?
What is a Service Level Agreement?
An SLA outlines the services and support a business pays to receive from a managed IT agency. The documents should cover services, priorities, responsibilities, guarantees, and warranties.
Crucially the SLA should also define the KPIs (key performance indicators) the IT company is contractually obligated to fulfil. The KPIs form an important factor in enjoying an ongoing relationship with your IT provider but also give you leverage in the event of a dispute. SLAs are binding contracts.
The document should also include what the consequences will be if the vendor falls short in reaching KPI objectives or you do not receive a particular service you agreed to pay for. The SLA is, therefore, an integral part of outsourcing your IT needs to a third-party provider.
The primary function of an SLA is to protect your business from financial loss. It also makes sure that both parties understand what the expectations are, but may also determine when a business can enforce the SLA in the event the IT support agency you’re working with does not have the capacity to deliver the KPIs they promise.
For example, if a managed IT service provider fails to meet any of the KPIs, you can trigger the service credits you’ve agreed upon or enforce the conflict resolution clause via a legal route.
How do SLA’s Protect Your Business?
Experiencing continuous IT issues can be costly for a business. Downtime and cybersecurity threats are among the leading causes of financial loss attributed to tech-operated businesses.
The purpose of an SLA is to protect your business from suffering financial loss if the managed IT agency you sign a contract with fails to keep your business IT infrastructure functioning to levels that you expect – which are stated in the featured KPIs of an SLA.
IT companies know they will need to meet stated KPIs to ensure they don’t risk any financial loss as well. Therefore, KPIs are also an indicator of the level and standard of service you can expect to receive from a managed IT service.
For example, the IT professionals at Micro Pro aim to deliver an uptime of 99.999%. This appears in our SLAs because we are confident our preventative technologies, strategies and 24/7 support help desk avoid downtime.
With this in mind, determine the areas of your business that rely on IT services and determine what level of service you would expect to receive from an IT service provider.
To give you some idea of what you should expect from a vendor, let’s take a look at what an IT SLA should include.
What should be included in an SLA?
A typical SLA will include multiple clauses but should be separated into four parts.
I. Key Performance Indicators
The KPIs are the most important feature of an SLA because they give you the measure of the service levels you should expect to receive. This section identifies whether you are receiving value from your service provider.
II. List of Services
The list of services outlines the actions or deliverables an IT agency will provide under the terms of the SLA. This section should include the level of commitment the service provider is willing to offer.
Make a note of the level of commitment stated by the vendor. You should ensure that any disclaimers are reasonable and do not provide your service provider with a get-out-of-jail-free card.
For example, what do you consider is a reasonable response time to respond to an IT issue? It should also be noted that a response time is not the same as a repair time. The time it takes to fix a problem will depend on the level of complexity, but this is an area you should discuss openly with your outsourced IT team.
You should also expect to find a clause that allows for issues or delays that are outside the control of the IT company. These can happen, but again they should be reasonable.
For example, if your system goes down because of a power cut, the onus of responsibility does not lie with your IT provider unless the SLA provides a solution for retrieving uptime if your electricity supply goes down (i.e. on-site generator).
Another commitment avoidance clause to watch out for relates to cybersecurity. Should you happen to suffer a security breach, it must be determined whether your IT service provider implemented an effective strategy and performed all their contractual obligations laid out in the SLA in good time.
III. Consequences for Poor Performance
As mentioned above, you want to be assured that you are receiving value for money from your service provider. If you’re not, you shouldn’t have to pay for a service you are not receiving.
An SLA with a reputable IT agency will include a section that outlines what will happen if they fail to meet KPI targets. The most common consequence is known as “service credits” which entitles the client to a discount on a future invoice.
For example, let’s say you sign a contract for a monthly retainer. In October, your IT service provider fails to uphold two of the KPIs stated in the SLA. You are entitled to a reduction on your November invoice.
IV. Conflict Resolution Process
When an IT service provider consistently fails to deliver a service you are paying for, and potentially refuses to compensate you for missing KPIs, a signed SLA can be used to take legal action against the company.
The conflict resolution process should outline the steps that should be taken before you trigger legal intervention. First of all, there should be a provision that gives your service provider the opportunity to right their wrongs within a reasonable amount of time.
The SLA should also state the notification period a business should give an underperforming IT agency. This will typically be 30 days.
What KPIs and Services Should You Expect in an IT SLA?
High Availability
The amount of uptime a vendor promise is a significant KPI in an IT SLA. The definition of “high availability” not only refers to uptime but the performance of your IT infrastructure. Your network could be working 100% of the time, but if it’s only functioning at 50% of its speed capacity, that cannot be considered “high availability”.
Support Hours
IT companies usually charge the amount of time they offer clients support by the hour. The SLA should, therefore, state the number and time of hours you need access to a support desk. If your business is open 24/7 you will need access to a 24/7 IT Help Desk.
Maintenance Blackouts and Notifications
IT service providers typically perform maintenance all the time. Fortunately, most applications can be run behind the scenes without any disruption to end users.
There will come a point, however, when your IT company needs to perform full-scale maintenance that will shut your business network down. It’s in your best interests to determine how maintenance blackouts will impact your business operations and your profits.
In most cases, when maintenance operations require a network blackout, you should expect a managed IT service provider to perform maintenance services outside your normal office hours. This will cause a minimal amount of disruption.
It’s worth noting that some managed IT providers do not work at night or at weekends. If downtime during the day has a significant impact on your profitability, maintenance works during office hours is not a good option. So include maintenance blackouts in the SLA.
Time to Respond v Time To Repair
The amount of time it takes to get an IT outage back up and running is arguably the clause where conflict is most likely to arise. As mentioned above, there should be a distinction made between response times and repair times.
An SLA should include an average response time. This will detail the minimum and maximum time it takes to respond to issues you register with your MSP when you call your help desk.
Response times should also list how quickly your outsourced IT team should respond in the event of a data breach and other time-sensitive issues. You should expect rapid response times.
The time to repair is measured from the time you place a ticket to the time it takes to resolve the issue. This metric will be determined by the complexity of particular issues ranging from basic, medium, difficult and extremely difficult.
The level of complexity is determined by the IT support but should be allocated a category when the issue is logged.
Indemnity Clause
An indemnity clause is an important provision you should look out for because not every outsourced IT provider includes it as a standard clause in their SLA. So you may need to request that the clause is placed in.
The indemnity clause covers you for financial loss if your MSP breaches any of the services, priorities, responsibilities, guarantees or warranties stated in the SLA. This is the clause that determines penalty amounts for failing to meet KPIs together with legal fees if litigation is enforced.
Examples of When You Can Enforce an IT SLA
There are many ways in which a business can legally enforce penalties and conflict resolution proceedings stated in an SLA. The instances that apply to a business owner should be self-evident in an SLA, but to give you some idea, I have listed several examples below.
I’ve already mentioned that downtime or poor availability permits customers to trigger a clause that determines the consequence of poor performance. But what constitutes poor performance?
Usually, this will relate to a financial loss suffered because of an outage that could have been prevented. But it can also refer to the loss of customers because your IT system does not function.
For example, if your VoIP phone service doesn’t work properly and either impairs your ability to secure new customers or retain existing customers, you have a case to argue that your MSP is causing financial loss.
If you’re paying for patch management services, you are entitled to expect a speedy response from your MSP. Whenever a software company releases a security update, it’s in your best interests to ensure operating systems company-wide are updated.
Compliance regulations hold companies that do not perform patch updates in a reasonable amount of time accountable. That means if you suffer a data breach because your IT company failed to perform an update, you can sue them for damages imposed by the Information Commissioner’s Office and potential loss of business.
Leveraging the Value of an IT SLA
Micro Pro recognise the importance of building a long-term partnership with our clients and always look to provide real value by underpromising and overdelivering.
Although we appreciate the quality of service is subjective, we believe that an SLA ultimately determines whether your IT partner is providing real value. When we enter into a partnership with a business, we judge our success by how much success we help your company to achieve.
Having served multiple companies in London and the southeast of England for over 20 years, Micro Pro is established as a leading IT support provider in London. Our commitment to achieving the KPI in IT SLAs is unwavering.
