What are the benefits and drawbacks of using standard or customized SLAs for different types of services?

Standardizing SLA has its own benefits and disadvantages - Benefits include- It can help streamline the operations, providing consistency in service delivery, easy to create, manage and administer. Predefined metrices, target and terms can be used, It help improve efficiency by saving time and effort to negotiate and finalize the SLA, they can easily accommodate changes in service offering, client need and business growth Some drawbacks include- Lack of flexibility to address unique client requirements, service offerings, does not address need and expectation. Difficult to customize leading to gaps, often get misaligned with client expectation. As customization not possible does not address business dynamics, customer changing requirement.

An SLA is a written contract between a service provider and a customer that describes the services to be provided, the standards of performance for those services *Service description: A detailed summary of the agreement, parties involved, and services provided *Quality of the service: Details of the standard of the services *Responsiveness of the service: Details of how quickly the service will be delivered *Penalties on failure to meet the agreed term *Performance measuring:?List of metrics?that need to be measured, including how they are measured

1. Standard SLAs: Benefits: Easy to implement, consistent, cost-effective, and scalable. Drawbacks: Limited flexibility, may not meet unique client needs. 2. Customized SLAs: Benefits: Tailored to client priorities, builds trust, and adds competitive advantage. Drawbacks: Higher costs, complex to manage, and resource-intensive. When to Choose: Use Standard SLAs for simple, uniform services. Opt for Customized SLAs for high-value clients or complex services. A hybrid approach often provides the perfect balance!

A standard generic SLA is a good starting point when it comes to creating an SLA that meets your needs and helps ensure all service elements are covered.

What are the drawbacks and benefits of using standard SLAs versus customized SLAs? ?? Standard SLAs: While universal standard SLAs don't exist, creating one SLA for your company is beneficial. It allows you to offer a consistent service level to all customers and ease of administration. ?? Drawbacks of Custom SLAs: Customizing SLAs for each customer can be hard to manage. Keeping track of different commitments can become overwhelming and impractical. ?? Benefits of Your Own Standard SLA: Implementing your own SLA tailored to your business that everyone gets simplifies administration. It ensures uniformity in service commitments across all deals, making it easier to maintain consistency and quality.

The following basics in place: Service delivery description Tools for service delivery (people, infrastructure, knowledge) Disaster recovery plans/business continuity plans Metrics and benchmarks for service availability Performance parameters Frequency of measurement of metrics and performance parameters Reporting (form, format, frequency) Scheduled change management processes Unscheduled change management processes Response levels for breaches of SLA Problem management and escalation Quality management criteria Provider obligations Customer obligations Penalties for breaches Confidentiality/IP management Fees, expenses and payments Contract renewal/termination

Negotiating customized SLAs has trade-offs. ?? Provider's Challenge: For service providers, custom SLAs are often inefficient and time-consuming. Although large customers may demand them, minimizing customizations is generally more manageable. It's tough to track different service levels and calculate varying service credits ?? Customer Perspective: As a customer, it's tempting to push for custom SLAs. However, it's often better to understand what the service provider is capable of. It doesn’t help anyone to establish unrealistic service levels. If the company’s standard SLA doesn't fit your needs, then consider customizations. Ensure the provider can realistically meet them.

SLAs need to be simple and straight forward, so that they can be applied effectively. They should also be realistic, in line with industry best practice and reflect what is achievable. This does not mean service providers should not be put on the spot to provide the best possible service.

SLA’s were originally conceived for the IT industry, where precise metrics can be applied. A ‘standard’ SLA is an example where precise metrics can be used. For my industry (Airport) i need to adapt and be flexible with our SLA’s due to the different nature of our stakeholders. They are however all based on the same template, with the preamble and reporting conditions the same for all. The flexibility is within the variations clause, so this could be ‘the company will ensure 40 check-in desks are open consistently’. This is easy to monitor via active KPIs. The difficulty is when the SLA point becomes subjective - such as ‘the food court table will be cleaned at the most 2 minutes after the passengers have vacated the table, when it is busy.

Choose measurements that motivate the right behavior.? >How would you optimize your performance? Does that optimization support the originally desired results? Ensure that metrics reflect factors within the service provider’s control > if the client provides change specifications for application code several weeks late, it is unfair and demotivating to hold the service provider to a pre-specified delivery date. Making the SLA two-sided by measuring the client’s performance on mutually dependent actions is a good way to focus on the intended results. Choose measurements that are easily collected. Set a proper baseline.?Defining the right metrics is ?? battle.The metrics must be set to reasonable, attainable performance levels

It is possible to have business critical services that are perceived as being "low cost", so it is important to understand what the impact would be if a service went down and how long it is down for.

The challenge also comes with the Risk Assessment and Prioritisation of tasks/resolutions. e.g. in stock broker/banking/payment & card industry the first priority to be given to the Regulatory guidelines/penalties and then Risks like Reputational Risk (very important), Statutory Risk can be mitigated. The customer satisfaction is also important which needs to be taken care by building a good relationship as every customer is a King, here nothing can go beyond a set threshold irrespective of the priority/severity. The dynamic SLA is required, however the right Prioritisation at the right time needs to be done by Managers/HODs. Nothing can be done if bosses are sleeping with their own dream (priority). That’s also a reality!

Using standard SLAs offers consistency and simplicity, making it easier to manage expectations across multiple clients and services. They streamline the onboarding process and reduce negotiation time, which is especially beneficial for high-volume or similar service contracts. On the other hand, customized SLAs allow for greater flexibility and can be tailored to meet the unique needs of specific clients or services, fostering stronger relationships and enhancing satisfaction. However, customizing SLAs can lead to complexity and increased administrative burden, potentially creating inconsistencies if not managed carefully. Ultimately, finding the right balance between standardization and customization is key for effective service delivery.

Nothing wrong with using both types of SLA, as long as each one used is appropriate for the service that it applies to. It is always a good idea to use a generic SLA as the basis for customization.

I see no major issue with using both generic and bespoke SLA as long as each can be monitored effectively and targets agreed are being met.

Below the best practice for both the SLA : * Take an inventory of what you offer, and how it aligns to the business goals of your company and your customers *Ask how you’re doing. Talk directly with your customers and solicit constructive feedback. What are you doing well, and what could you do better? Are you offering the right services? *Build a draft of new SLAs based on the results of the steps above. Get rid of the services you no longer need. *creating complex SLAs use a series of smaller ones, so you can measure and report on the individual pieces of your workflow, not just the entire pie. This also makes it easier to update your SLAs and keep them current.

It is worth stating what the impact would be if service targets are not met, along with what resources are required, escalation procedures and penalties.

Standardize SLA can be cost effective, simplicity, predictable & consistent. Best use case in small business customers or utility services. But it lacks flexibility, competitive disadvantage, customer dissatisfaction up to certain level. Customized SLA bring higher customer satisfaction, stronger competitive advantage, flexibility & agility. Best use case for high value & strategic clients. But it may be time consuming with higher costs, scalability issues, complicate performance monitoring. The choice between standard and customized SLAs depends on the specific needs and context of the services being provided. Balancing both approaches ensures better satisfaction and strong relationships, all while keeping complexity & costs in check