In every instance where a consultant is being brought in to do work for an organization, it is essential both parties are in complete agreement about expectations.
A service level agreement (SLA) is a negotiated agreement between two parties designed to create a common understanding about expected services, including priorities and responsibilities. For HR the need most often arises when it comes time to implement an HRMS.
An SLA must not turn into a mechanism to stifle complaints, nor will it be a quick fix for troubled waters. But a well-constructed SLA will clearly outline what is expected of the consultant and in so doing become an invaluable instrument in any project that depends upon external partners for success.
An SLA gives you many advantages and should be thought of as:
A communications tool: The true value is in the establishment of clear lines of communications.
A conflict-prevention tool: An SLA sets out the process to be followed to resolve issues and in fact prevent them. The agreement documents an understanding of the needs and priorities of the groups involved.
A living document: This is probably the most important benefit. This is not a document to be signed by the parties and then filed for safekeeping. The groups involved should agree on the frequency the SLA would be reviewed and updated. It should be clear on how adjustments to the document will be negotiated.
The bottom line is that the service level agreement should serve as an objective basis for gauging service effectiveness. It ensures that both parties use the same criteria to evaluate the level of service.
When is an agreement not really an agreement?
SLAs do not develop well from a template. The whole process of planning the agreement generally requires a considerable amount of time and effort. Information must be gathered, analyzed, documented and discussed. The whole process of discussion, negotiation and consensus-building is what makes it work. Unfortunately, too often the process of creating an SLA is initiated by the service provider. They do this more frequently than the HR department because they have more experience and know they have much to gain if expectations are clearly documented. What’s more they are also adding to their billing time.
Handing SLA development over to the provider leads to the customer not having the degree of input necessary to make this a successful process. A good SLA is a collaborative process otherwise the contract will be ignored by one or both parties.
If the parties work together successfully to build the SLA, the battle is already half won. The HR department must be part of the process or else there is no real agreement.
Elements of an SLA
To be really effective, an SLA must incorporate both service and management elements, yet often many SLAs lack management elements. The results will often be less that what was expected.
Service elements include:
•services provided, but it should also be stated explicitly what is not provided;
•availability of service;
•standards, such as the period when the service will be provided;
•responsibilities;
•costs; and
•procedures for when problems escalate or issues arise.
Management elements include:
•how will service effectiveness be tracked;
•how information related to effectiveness will be reported;
•how disagreements will be resolved; and
•how the parties will revise the agreement.
Establishing an SLA
Timing is very important in the development and implementation of an SLA. In fact, it is the essential first step anytime an HR department is going into a project that requires a partnership with a third party.
Just as an SLA that is left too late can cause problems, if the agreement is created for the wrong reasons larger problems will ensue. For example, sometimes service providers want to create the SLA to keep the customer complaints in check. The customer should be on the lookout for this during the development of the agreement and raise the issue right then and there. The service provider must seek the input of the customer and make every effort to address concerns and let it be seen that there is an open dialogue on the issues.
Conversely, from time to time customers take the initiative to structure an agreement hoping to impose unrealistic expectations on the provider. In this case too, the results will be no better than where the service provider works to craft the SLA to its own advantage.
If the customer really has concerns about service issues they must be clearly communicated. The customer also has an obligation to understand what the service provider is capable of realistically doing for them.
If there are underlying problems of this nature, they must be fixed before even trying to establish an SLA.
Who does what
Quite often the division of roles and responsibilities between parties are not as clear as they should be. Common issues include:
•ambiguous job descriptions;
•gaps in responsibilities;
•confusion between regional entities; and
•roles that change frequently.
We have all seen these issues in one work environment or another. An SLA will not solve these problems. Clarification of the issues is needed first. There have been cases where after these issues were resolved, it was determined that an SLA was no longer needed.
Time to establish an SLA
There is no set time on how long it takes to develop an SLA. It will vary from situation to situation and many factors can affect its development, including:
Service environment: The number of services covered, their complexity and the length of time it takes the parties to come to agreement on the conditions of service delivery.
Negotiations: Face-to-face negotiations are generally best as it facilitates the discussions and paves the way for faster negotiations of the end product. It’s generally faster to develop an SLA in a headquarters environment than in an environment where the customer is spread around geographically.
Relationships: Where the parties already have a degree of respect for the other, the process will go faster. If trust must be developed, it’s a time investment that can’t be avoided.
A model, or lack thereof: The first SLA usually takes the longest. Once a good one is developed the ones that follow are generally faster.
Poor history: If there has been a previous bad experience in the development of an SLA, some baggage will carry over. It is important to recognize that attitudes may be coloured by the bad experience, but even more important not to let those bad experiences from the past impede the current initiative.
Sometimes managers will suggest to staff that an SLA can be developed quickly. This is very bad advice. Fortunately, once teams start the project, they soon realize this is not going to be a cakewalk and reality takes over.
Conversely, HR departments must be aware of the SLA development that never ends. Most everyone has some experience with a project where people say it is taking longer than expected to complete. In reality it has completely stalled.
With SLA development, this is often caused by the lack of knowledge on how to proceed. This can be overcome by training. What is more difficult to surmount is the lack of commitment from one or more of the parties. If management does not make a serious commitment to the project with the proper staffing, progress is going to be difficult if not impossible.
Three to six months is the general rule of thumb for the creation of a good SLA. When conditions are ideal, the lower end, at about three months is possible but it requires full dedication and understanding of the process.
Al Doran is President of Phenix Management Int’l, a Toronto-based management consulting firm specializing in HRMS issues. He is co-author of the HRMS book published by Carswell, Human Resource Management Systems: A Practical Approach (http://www.hrmsbook.com). He may be reached at [email protected].
Key steps in the process
•Gathering information: The customer must review and articulate their service needs and priorities. Service providers must review this and, using their own history of service delivery, determine what level of service they can provide in this case. Service providers must seek out the level of customer satisfaction expected by the client.
•Ensure full agreement: Both parties must have a full understanding of the agreement. This often takes considerable discussion.
•Establish ground rules: This includes methods for scheduling work, division of responsibility and conflict resolution. This must be done first to facilitate the process.
•Develop the agreement: This is the longest and most difficult part of the process but when the working draft agreement is completed a working relationship should have evolved between the parties.
•Generate buy-in: After the draft agreement is finalized, all members involved must have an opportunity to review the agreement, raise questions and make suggestions. Once this is done a final agreement can be crafted that will go through the necessary sign-offs. Everyone involved should have full “buy-in” to the final SLA.
•Complete pre-implementation tasks: Before the actual project gets started the parties should agree on other key issues such as reporting methods, key steps in the project, work procedures and a training program.
•Implement and manage the agreement: A lot of work goes into creating the agreement but to keep it alive and successful it must be managed. It should be clear who the contact points for issues and problems are, the frequency of the reviews must be agreed upon, as well as a process for making changes to the SLA.
A service level agreement (SLA) is a negotiated agreement between two parties designed to create a common understanding about expected services, including priorities and responsibilities. For HR the need most often arises when it comes time to implement an HRMS.
An SLA must not turn into a mechanism to stifle complaints, nor will it be a quick fix for troubled waters. But a well-constructed SLA will clearly outline what is expected of the consultant and in so doing become an invaluable instrument in any project that depends upon external partners for success.
An SLA gives you many advantages and should be thought of as:
A communications tool: The true value is in the establishment of clear lines of communications.
A conflict-prevention tool: An SLA sets out the process to be followed to resolve issues and in fact prevent them. The agreement documents an understanding of the needs and priorities of the groups involved.
A living document: This is probably the most important benefit. This is not a document to be signed by the parties and then filed for safekeeping. The groups involved should agree on the frequency the SLA would be reviewed and updated. It should be clear on how adjustments to the document will be negotiated.
The bottom line is that the service level agreement should serve as an objective basis for gauging service effectiveness. It ensures that both parties use the same criteria to evaluate the level of service.
When is an agreement not really an agreement?
SLAs do not develop well from a template. The whole process of planning the agreement generally requires a considerable amount of time and effort. Information must be gathered, analyzed, documented and discussed. The whole process of discussion, negotiation and consensus-building is what makes it work. Unfortunately, too often the process of creating an SLA is initiated by the service provider. They do this more frequently than the HR department because they have more experience and know they have much to gain if expectations are clearly documented. What’s more they are also adding to their billing time.
Handing SLA development over to the provider leads to the customer not having the degree of input necessary to make this a successful process. A good SLA is a collaborative process otherwise the contract will be ignored by one or both parties.
If the parties work together successfully to build the SLA, the battle is already half won. The HR department must be part of the process or else there is no real agreement.
Elements of an SLA
To be really effective, an SLA must incorporate both service and management elements, yet often many SLAs lack management elements. The results will often be less that what was expected.
Service elements include:
•services provided, but it should also be stated explicitly what is not provided;
•availability of service;
•standards, such as the period when the service will be provided;
•responsibilities;
•costs; and
•procedures for when problems escalate or issues arise.
Management elements include:
•how will service effectiveness be tracked;
•how information related to effectiveness will be reported;
•how disagreements will be resolved; and
•how the parties will revise the agreement.
Establishing an SLA
Timing is very important in the development and implementation of an SLA. In fact, it is the essential first step anytime an HR department is going into a project that requires a partnership with a third party.
Just as an SLA that is left too late can cause problems, if the agreement is created for the wrong reasons larger problems will ensue. For example, sometimes service providers want to create the SLA to keep the customer complaints in check. The customer should be on the lookout for this during the development of the agreement and raise the issue right then and there. The service provider must seek the input of the customer and make every effort to address concerns and let it be seen that there is an open dialogue on the issues.
Conversely, from time to time customers take the initiative to structure an agreement hoping to impose unrealistic expectations on the provider. In this case too, the results will be no better than where the service provider works to craft the SLA to its own advantage.
If the customer really has concerns about service issues they must be clearly communicated. The customer also has an obligation to understand what the service provider is capable of realistically doing for them.
If there are underlying problems of this nature, they must be fixed before even trying to establish an SLA.
Who does what
Quite often the division of roles and responsibilities between parties are not as clear as they should be. Common issues include:
•ambiguous job descriptions;
•gaps in responsibilities;
•confusion between regional entities; and
•roles that change frequently.
We have all seen these issues in one work environment or another. An SLA will not solve these problems. Clarification of the issues is needed first. There have been cases where after these issues were resolved, it was determined that an SLA was no longer needed.
Time to establish an SLA
There is no set time on how long it takes to develop an SLA. It will vary from situation to situation and many factors can affect its development, including:
Service environment: The number of services covered, their complexity and the length of time it takes the parties to come to agreement on the conditions of service delivery.
Negotiations: Face-to-face negotiations are generally best as it facilitates the discussions and paves the way for faster negotiations of the end product. It’s generally faster to develop an SLA in a headquarters environment than in an environment where the customer is spread around geographically.
Relationships: Where the parties already have a degree of respect for the other, the process will go faster. If trust must be developed, it’s a time investment that can’t be avoided.
A model, or lack thereof: The first SLA usually takes the longest. Once a good one is developed the ones that follow are generally faster.
Poor history: If there has been a previous bad experience in the development of an SLA, some baggage will carry over. It is important to recognize that attitudes may be coloured by the bad experience, but even more important not to let those bad experiences from the past impede the current initiative.
Sometimes managers will suggest to staff that an SLA can be developed quickly. This is very bad advice. Fortunately, once teams start the project, they soon realize this is not going to be a cakewalk and reality takes over.
Conversely, HR departments must be aware of the SLA development that never ends. Most everyone has some experience with a project where people say it is taking longer than expected to complete. In reality it has completely stalled.
With SLA development, this is often caused by the lack of knowledge on how to proceed. This can be overcome by training. What is more difficult to surmount is the lack of commitment from one or more of the parties. If management does not make a serious commitment to the project with the proper staffing, progress is going to be difficult if not impossible.
Three to six months is the general rule of thumb for the creation of a good SLA. When conditions are ideal, the lower end, at about three months is possible but it requires full dedication and understanding of the process.
Al Doran is President of Phenix Management Int’l, a Toronto-based management consulting firm specializing in HRMS issues. He is co-author of the HRMS book published by Carswell, Human Resource Management Systems: A Practical Approach (http://www.hrmsbook.com). He may be reached at [email protected].
Key steps in the process
•Gathering information: The customer must review and articulate their service needs and priorities. Service providers must review this and, using their own history of service delivery, determine what level of service they can provide in this case. Service providers must seek out the level of customer satisfaction expected by the client.
•Ensure full agreement: Both parties must have a full understanding of the agreement. This often takes considerable discussion.
•Establish ground rules: This includes methods for scheduling work, division of responsibility and conflict resolution. This must be done first to facilitate the process.
•Develop the agreement: This is the longest and most difficult part of the process but when the working draft agreement is completed a working relationship should have evolved between the parties.
•Generate buy-in: After the draft agreement is finalized, all members involved must have an opportunity to review the agreement, raise questions and make suggestions. Once this is done a final agreement can be crafted that will go through the necessary sign-offs. Everyone involved should have full “buy-in” to the final SLA.
•Complete pre-implementation tasks: Before the actual project gets started the parties should agree on other key issues such as reporting methods, key steps in the project, work procedures and a training program.
•Implement and manage the agreement: A lot of work goes into creating the agreement but to keep it alive and successful it must be managed. It should be clear who the contact points for issues and problems are, the frequency of the reviews must be agreed upon, as well as a process for making changes to the SLA.
