How to Establish Service Level Agreements N K AOMI ARTEN 781-986-8148 [email protected] www.nkarten.com www.ServiceLevelAgreements.com © 2003 Naomi Karten. All rights reserved. Table of Contents WELCOME TO THIS HANDBOOK Greetings, This handbook represents more than a decade of experience providing SLA training and consulting services internationally. I hope you find it helpful. Please note that this handbook is copyrighted. You have my permission to reproduce it for use by those with whom you are creating SLAs and those who are participating in the effort. However, reproduction or use of this handbook for any other purpose is prohibited except with my written permission. And you’ll need my written permission to use this handbook, in whole or in part, for commercial purposes. I invite you to contact me at [email protected] to discuss permissions. For information on my SLA presentations, seminars, and consulting services, see Chapter 9 or visit www.nkarten.com/slaservices.html. Be sure to check out my articles on SLAs and numerous related topics at www.nkarten.com/indepth.html and in my newsletter, Perceptions & Realities, at www.nkarten.com/newslet.html. If you would like to be notified when I’ve posted new articles or newsletters, let me know and I’ll be happy to add your name to the list. I wish you all the best in your SLA efforts. Naomi Karten _____________________________________________________________________________________________________________________________________________________________________________ Establishing Service Level Agreements © 2003 NAOMI KARTEN www.nkarten.com. All rights reserved. Table of Contents CONTENTS IN DETAIL Introduction About the author........................................................................... i Objectives of this book.................................................................. ii Framework of this book......... ...................................................... iii Disclaimer...................................................................................... iv Permission to use samples and examples................................... iv 1. Service Level Agreements: Role and Key Features Chapter overview.......................................................................... 1.1 Case study to set the stage........................................................... 1.2 Recommendations from the case study........................................ 1.3 What a service level agreement is................................................. 1.5 What a service level agreement is not .......................................... 1.6 The parties to an agreement......................................................... 1.7 Key participants in establishing an SLA..................................... 1.9 Variations in SLA focus................................................................. 1.10 Why bother? Benefits of an agreement........................................ 1.11 Five categories of benefits ............................................................. 1.12 The role of the SLA in reducing uncertainty............................... 1.13 How long should an SLA be?........................................................ 1.14 How long should an SLA take to establish?............................... 1.15 How long should an SLA remain in effect?............................... 1.16 When not to establish an SLA....................................................... 1.17 How to make an SLA fail!............................................................. 1.18 Remember the human factor........................................................ 1.20 2. The SLA Document and Process at a Glance Chapter overview......................................................................... 2.1 The SLA document vs. the SLA process.................................... 2.2 The key elements of the SLA document.................................... 2.3 The functions of the key elements....................................... 2.4 A template outline................................................................ 2.5 What to place in an appendix............................................... 2.8 Possible additional SLA sections......................................... 2.9 Elements of a contractual agreement................................... 2.10 The SLA process in brief.............................................................. 2.12 SLA process: Critical initial steps......................................... 2.13 SLA process: Development checklist................................... 2.14 _____________________________________________________________________________________________________________________________________________________________________________ Establishing Service Level Agreements © 2003 NAOMI KARTEN www.nkarten.com. All rights reserved. Table of Contents CONTENTS IN DETAIL (cont.) 3. Exercise 1: Evaluate a Sample Agreement Chapter overview......................................................................... 3.1 How to evaluate this agreement................................................ 3.2 Sample agreement........................................................................ 3.3 Observations about this agreement............................................ 3.8 SLA evaluation: an important caveat......................................... 3.13 Evaluation criteria........................................................................ 3.14 4. The Service Elements of an SLA Chapter overview........................................................................ 4.1 Overview of the service elements............................................... 4.2 Service element #1: Context-setting information....................... 4.3 Examples of context-setting information............................. 4.6 Service element #2: Description of services............................... 4.7 Do you have a service description?..................................... 4.9 Is your service description clear?......................................... 4.10 Service element #3: Service standards....................................... 4.11 Service standards from everyday life.................................. 4.12 A lesson about the risks of service standards..................... 4.15 Five categories of service standards.................................... 4.16 Examples of the five categories...................................... 4.18 Caveats about selecting service standards.......................... 4.19 Ingredients of a service standard ........................................ 4.20 Analysis: service standard #1............................................. 4.22 Analysis: service standard #2............................................. 4.24 Excerpts from service standards......................................... 4.25 Service dependencies and examples.................................... 4.26 Service exceptions................................................................ 4.27 Examples of service exceptions..................................... 4.28 Escalation paths and examples........................................... 4.29 Division of responsibilities ................................................. 4.30 Examples of division of responsibilities....................... 4.31 Real-time service standards....................................................... 4.32 5. The Management Elements of an SLA Chapter overview........................................................................ 5.1 Overview of the management elements..................................... 5.2 Management element #1: Service tracking & reporting.. 5.3 What to track: objective measures ...................................... 5.4 What to track: subjective perceptions ................................. 5.5 Focus on patterns of service delivery................................... 5.6 Recommendations for service tracking................................. 5.7 Planning service reporting...................................................... 5.8 _____________________________________________________________________________________________________________________________________________________________________________ Establishing Service Level Agreements © 2003 NAOMI KARTEN www.nkarten.com. All rights reserved. Table of Contents CONTENTS IN DETAIL (cont.) 5. The Management Elements of an SLA (continued) Recommendations for service reporting............................... 5.9 Examples of service tracking and reporting......................... 5.10 Sample report........................................................................... 5.11 Sample report: points worth noting..................................... 5.12 Management element #2: Periodic review................................. 5.14 The objectives of a periodic review..................................... 5.15 Methods of conducting a periodic review........................... 5.16 Periodic review frequency.................................................... 5.17 Periodic review participants................................................ 5.18 Periodic review examples.................................................... 5.19 Management element #3: Change process................................. 5.20 Creating a change process.................................................... 5.21 Examples of change process................................................. 5.22 6. Exercise 2: Evaluate a Sample Agreement Chapter overview......................................................................... 6.1 How to use this agreement.......................................................... 6.2 Evaluation criteria: another approach........................................ 6.3 Sample agreement......................................................................... 6.4 Observations and recommendations.......................................... 6.15 7. Critical Initial Steps Chapter overview........................................................................ 7.1 Step 1: Assess whether an SLA is appropriate......................... 7.2 Step 2: Ensure management commitment................................... 7.3 Step 3: Designate SLA managers................................................ 7.4 Why this role is so critical..................................................... 7.5 Attributes of an SLA manager.............................................. 7.6 Responsibilities of an SLA manager..................................... 7.7 Questions regarding SLA managers...................................... 7.8 Step 4: Provide SLA education.................................................. 7.10 Who and how to educate...................................................... 7.11 Topics for an overview presentation.................................... 7.12 8. Development Checklist Chapter overview......................................................................... 8.1 Step 1: Assess current services.................................................... 8.2 Assessment advice for providers.......................................... 8.3 Assessment advice for customers......................................... 8.4 _____________________________________________________________________________________________________________________________________________________________________________ Establishing Service Level Agreements © 2003 NAOMI KARTEN www.nkarten.com. All rights reserved. Table of Contents CONTENTS IN DETAIL (cont.) 8. Development Checklist (continued) Step 2: Gather customer feedback.............................................. 8.5 Guidelines for gathering feedback........................................ 8.6 Sample feedback-gathering questions.................................. 8.7 Step 3: Ensure agreement about the agreement......................... 8.8 Step 4: Develop a draft SLA..................................................... 8.9 First develop the big picture................................................ 8.10 Select a meeting format........................................................ 8.11 Development tips.................................................................. 8.12 Step 5: Solicit feedback from reviewers..................................... 8.13 Guidelines for soliciting reviewer feedback........................ 8.14 Step 6: Implement and manage the agreement......................... 8.16 Finalize the agreement .......................................................... 8.17 Complete pre-implementation activities............................. 8.18 Conduct a pilot…………………………............……….…… 8.19 Guidelines for conducting a pilot.................................. 8.20 Sign the agreement................................................................ 8.21 Manage the agreement.......................................................... 8.22 Responsibilities in managing an SLA............................. 8.23 Advantages and disadvantages of Web-based SLAs……... 8.24 9. My Services and Resources Chapter overview........................................................................ 9.1 SLA services and resources............................. .......................... 9.2 Training in how to establish SLAs........................................... 9.3 Overview of services and resources......................................... 9.4 _____________________________________________________________________________________________________________________________________________________________________________ Establishing Service Level Agreements © 2003 NAOMI KARTEN www.nkarten.com. All rights reserved. Introduction i ABOUT THE AUTHOR I’ve always been fascinated by human behavior. Drawing from my B.A. and M.A. in psychology, and extensive experience in technical and management positions, I’ve presented seminars and keynotes to more than 100,000 people internationally. My training, consulting, presentations, and writings have helped organizations and groups improve customer satisfaction, improve provider/customer relationships, strengthen teamwork, and manage change. I’m the author of Managing Expectations: Working With People Who Want More, Better, Faster, Sooner, NOW!, a book which offers a serious, light-hearted look (yes, both!) at expectations in the workplace and how to manage them better. My book, Communication Gaps and How to Close Them, describes how to use communica- tion as a tool to build relationships, strengthen teamwork, manage change, deliver superior service, and deal with everyday misunderstandings. My newsletter, PERCEPTIONS & REALITIES, offers ideas and advice on how to deliver superior service and build win-win relationships. Readers have described the newsletter as lively, informative, and a breath of fresh air. I’ve also published more than 300 articles in business and trade publications and websites. I’m a member of the National Speakers Association, and for three years was editor of NSA’s news- letter for international speakers. My eBooks include: (cid:140) How to Establish Service Level Agreements (cid:140) Why SLAs Fail and How to Make Yours Succeed (cid:140) How to Critique and Strengthen Your SLAs (cid:140) An SLA Template and How to Use It (cid:140) How to Survive, Excel and Advance as an Introvert (cid:140) Changing How You Communicate During Change (cid:140) 40 Frequent Feedback-Gathering Flaws and How to Fix Them (cid:140) How to Profit (Quickly!) by Writing a Handbook My website (www.nkarten.com) is regularly updated with articles on such topics as managing expectations, improving customer satisfaction, strengthening teamwork, managing change, and gathering customer feedback. I invite you to take a look. I’m an avid downhill skier who has taken numerous trips to the Rockies and the Alps. My husband and I enjoy helping friends and colleagues plan ski trips to faraway places. _____________________________________________________________________________________________________________________________________________________________________________ Establishing Service Level Agreements © 2003 NAOMI KARTEN www.nkarten.com. All rights reserved. Introduction ii OBJECTIVES OF THIS BOOK A service level agreement (SLA) is an excellent mechanism for creating a common understanding between a service provider and its customers about services and service delivery. It is a communication tool that helps to manage expectations, clarify responsi- bilities, and provide an objective basis for assessing service effectiveness. However, establishing a successful service level agreement can be a complex under- taking, and it is not the solution to every problem. If established in the wrong way or for the wrong reasons, it can create bigger problems than those it is trying to solve. This book will help you understand SLAs and prepare you to create your own SLA by: • Discussing what an SLA is — and what it is not • Describing what makes a service level agreement (SLA) work — or fail to work • Explaining how a service level agreement can help to improve communications, manage expectations, and build the foundation for a win-win relationship • Outlining the key elements of an SLA and their functions • Providing detailed guidelines for planning, developing and managing an SLA • Enabling you to critique an existing SLA or one that is under development _____________________________________________________________________________________________________________________________________________________________________________ Establishing Service Level Agreements © 2003 NAOMI KARTEN www.nkarten.com. All rights reserved. Introduction iii FRAMEWORK OF THIS BOOK This book is divided into 8 chapters. Here is a view of the structure by chapter: # TITLE FOCUS 1 SLA: Role and Key An overview of what an SLA is, its benefits, the Features parties to an SLA, and related information 2 The SLA Document Overview of the SLA document and the process of and Process at a Glance establishing an SLA 3 Exercise 1: Evaluation An exercise that develops skill in evaluating an SLA, of a Sample Agreement highlights common flaws in SLAs, and sets the stage for the information in Chapters 4 and 5. 4 The Service Elements Descriptions and examples of three Service Elements and three Management Elements that are key to a & successful SLA 5 The Management Elements 6 Exercise 2: Evaluation An SLA that offers an opportunity to gain experience of a Sample Agreement in critiquing an SLA using the information provided in the preceding chapters 7 Critical Initial Steps Guidelines for establishing an SLA, presented in the form of four critical initial steps and six steps that & comprise the development process 8 Development Checklist _____________________________________________________________________________________________________________________________________________________________________________ Establishing Service Level Agreements © 2003 NAOMI KARTEN www.nkarten.com. All rights reserved. Introduction iv DISCLAIMER This handbook focuses on the service level agreement as a communication tool and an expectations-managing mechanism. No claim is made that a service level agreement that you establish as a result of this book will legally protect you or your organization. If your service level agreement must be capable of protecting your company’s interests in a court of law, it is your organization’s responsibility to ensure that: • negotiation of your Agreement on behalf of your organization is carried out by skilled negotiators • your Agreement is reviewed, modified as needed, and approved by attorneys or other appropriate legal or corporate authorities before it is finalized and signed • your Agreement is valid, legal and enforceable according to the laws and regulatory provisions of the states and countries in which it is to be in effect PERMISSION TO USE SAMPLES AND EXAMPLES This book includes sample service level agreements (Chapters 3 and 6) and examples from many SLAs (Chapters 4 and 5) to assist you in organizing, word- ing, and writing your own Agreement. Permission is granted to use or adapt these samples and examples for use in your own organization. Please note that if you do so, it is your responsibility to tailor them to fit the needs and circumstances of your own organization. _____________________________________________________________________________________________________________________________________________________________________________ Establishing Service Level Agreements © 2003 NAOMI KARTEN www.nkarten.com. All rights reserved.