Service Level Agreement (SLA) is an essential element for any outsourced service or tech-based vendor contracts. It is an agreement that ensures a required level of service quality- which, when the vendor fails to meet, can draw upon the SLA to offer alternatives.
Crafting a productive SLA requires guidance and dependable knowledge on what all needs to be covered. This blog will discuss SLA's fundamentals and how to create an SLA for your contact center.
An SLA is a service-level agreement that ensures the quality of service that the customer can expect, mentioning any metrics by which the offered service should be monitored. It also states how to measure the service levels and what penalties are applicable if the agreed-upon service levels are not attained.
SLAs are created between two companies where one is a service provider, and the other is the buyer of that service. It is a critical component to select reliable contact center service providers.
However, the SLAs have a different impact based on the kind of contact center you have. Cloud-based contact centers have other clauses, whereas on-premise will have a different set of clauses. This is based on the liabilities specific to each category.
The service provider obviously, provides the SLA. Most vendors have their own standards of service against which they mention their prices. This is further negotiated by both the parties based on their needs and legal counsel advice.
Failure to adherence to the service standards often results in reduced costs or alternative solutions to meet the buyer's needs. SLAs have some definite impact on your business and how they can drive results. Both parties must heavily negotiate these agreements before conducting the deal to achieve optimum results.
An SLA must cover two primary criteria essential to any vendor-based business: service quality and management.
The service quality section states the specifics of the services offered, how long the service will be offered and its availability, provisions for providing this service, vital responsibilities, liabilities, and costs.
The management section covers the multiple metrics that will be used to measure service productivity. It also covers the reporting procedures, problem-solving methodology, indemnification clause to avert liability during third-party breaches, and an efficient method to update the agreement constantly, as per needs.
Remember, indemnification clauses are important as call centers use multiple services themselves, collaborating with various service providers to run their operations. This means there are different parties involved to run one operation smoothly. The indemnification clause binds the contact center to ensure none of their collaborations breach a single party's contract. These contact centers deal with a considerable amount of customer data that belongs to different businesses.
The way you define your SLA designates the quality of customer service offered in your brand's name.
Choosing the right service level metric is essential as it is proportional to what you are trying to achieve. Once you have decided what is more important, you can set the parameters to measure your success. Here are some standard metrics that are often monitored by a majority of businesses.
This determines the uptime required to support your business. E-commerce and financial sectors require 99.99% uptime (which means a downtime of 4 minutes per month) which is normal, especially if the company generates high revenue per hour. Service availability of the Telecom should be considered within the same uptime or separately dependent on the Telecom provider connectivity and alternatives available in the country.
These days, security breaches can result in hefty fines and loss of business. We are in a digital era where information can be easily duplicated or stolen. Therefore, it is necessary to analyze the contact center's security measures and the back-ups or preventive protocols if there is a breach.
Disaster Recovery (DR):
For mission critical processes, this is an important aspect to consider disaster recovery in the service level agreement. The DR Plan should be provided along with the SLA so that in case of any disaster or failure to invoke the DR, this plan should be revisited.
This is usually offered as a compensation for missing out the target SLA. These credits are usually proportional to the uptime following below the agreed SLA. Example, service credits may range from 10% for SLAs that drop below 97% to 50% if the outage lasts more than 72 hours.
Both the parties involved in the negotiation must disclose their pricing boundaries. Often, vendors mask their upgraded services with hidden costs, which might cause a significant hindrance in the future if not discussed while drafting the SLA.
There are potential income streams often hidden in SLAs, which is not apparent to the inexperienced eye. It is essential to consult the in-house legal team when drafting the SLA to eradicate such loopholes, potentially costing a fortune.
The buyer needs to mention where they are satisfied with automated service and where human support is imperative. Sometimes vendors promise 100% service availability but get away with automated responses, which is different from human interaction. The costs are also meant to be different for both services.
Customers are the ultimate point of revenue generation, and pleasing them should be the primary goal. Keeping this in mind, it is essential when creating your SLA. Happy customers mean high CSAT scores. Hence, there should be a solid emphasis on this metric when drafting your SLA.
A good practice is to do a periodic review of the SLA and any corrective action that need to be taken or Root Cause Analysis (RCA) provided for any unexpected downtime.
With cloud-based solutions, which is probably the new norm triggered by the pandemic, it is vital to have a tight SLA to escape any compliance. Gartner estimates that, by 2022, 50% of contact centers will be using CCaaS, up from approximately 10% in 2019. The primary thing that every buyer should ask is where is their data being stored? In adherence to that, if it is in a different country, what laws apply to it.
Here are five tips to ensure you do not burn out your business when treading into cloud-based solutions.
Some buyers need to know where their data is located for security reasons. This is specifically for buyers who are in the financial sector or the healthcare or fintech sector.
Your contracted call center might likely want to split your data across multiple servers and sites as a preventive measure to data loss. However, if the data is spread across the border, different laws might apply to it and the companies involved.
It is the customer's responsibility to do their research and contact the legal counsel team to comply with data laws. This means you have to do your bit of the hard work, or you can choose to split and save your sensitive data on their premise.
You can also choose to encrypt your data on the cloud and keep the keys to yourself. All these must be thoroughly discussed and mentioned in your SLA to avoid future disagreements.
Cloud contact centers as a service (CCaaS) are relatively new than on-premise. The customer must discuss how the vendor should compensate the company in case of performance failure or any outage.
Many new players in the market have sloppy cloud features which fail to provide the promised uptime or even have faulty connectivity. All these issues on a daily scale will have a poor impact on your business. As a customer, you must mention appropriate compensation for various possible situations.
Like how service credits, some contact center vendors might negotiate compensation to exceed the set target. This is only a natural expectation, especially when the contractor is getting charged when they fail to meet your needs.
However, when drafting this part of your SLA, be aware of what benefit the vendor brings to your business. If there is a significant benefit that can be measured and reported, then maybe compensation can be granted. Otherwise, there is no reason to credit the vendor.
For example: If the vendor offers extra uptime, which might come around to adding 40-50 minutes across the reporting period, then it doesn't really make much of a difference consistently. Hence, beware of what you are promising to your contractors.
Drafting an SLA for contact centers is not an easy task. It is a fundamental unit to kick-start your operations, so never take it casually. This is essentially meant for new entrepreneurs and businesses who are less experienced.
Major companies always have an in-house legal team to deal with such agreements as their businesses generate colossal revenue, running operations worldwide. Using a guide, consulting a lawyer, and doing your research will help you evaluate the risk dangling over your agreement. Be aware that cloud providers often do not negotiate much in their SLAs, so you must increase your chances by leveraging any credit or whatsoever.
Author Bio: Sweta is a growing technical writer with an experience in digital marketing. Outside work, she is a devoted Esports advocate.