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If you are a business owner who relies on a managed service provider (MSP) to handle your IT needs, you must have a clear and comprehensive service level agreement (SLA) with them. An SLA is a contract that defines the scope, quality, and terms of the services that the MSP will provide to you. It also specifies both parties’ responsibilities, expectations, obligations, and the methods and metrics for measuring and ensuring performance.

Choosing the right SLA for your business is crucial, as it can affect your operational efficiency, customer satisfaction, and profitability. A good SLA can help you achieve business goals, reduce risks, and optimize costs. A good SLA can lead to better service quality, unresolved issues, and wasted resources. Therefore, you must be careful and diligent when selecting and negotiating an SLA with your MSP.

This article will guide you through choosing the best SLA for your business. We will discuss the different types of SLAs that MSPs offer, how to evaluate and negotiate them, and how to manage and review them. By following our advice, you can make an informed and confident decision to benefit your business in the long run.

Types of SLAs

MSPs typically offer different SLA levels to suit clients’ needs and budgets. The most common types of SLAs are:

Basic

This is the lowest and cheapest level of SLA, which provides the minimum level of service and support. It usually covers only the essential and routine tasks, such as backup, maintenance, and monitoring. It does not guarantee any response or resolution times or include any proactive or preventive measures. This type of SLA is suitable for businesses with simple and stable IT environments, low service requirements, and a high tolerance for downtime.

Standard

This is the mid-range level of SLA, which provides moderate service and support. It usually covers more tasks and features than the basic level, such as security, patching, and reporting. It also guarantees some response and resolution times, but they may vary depending on the priority and severity of the issues. It may also include proactive or preventive measures, such as alerts and recommendations—this type of SLA suits businesses with moderate IT complexity, service expectations, and downtime impact.

Premium

This is the highest and most expensive level of SLA, which provides the maximum level of service and support. It usually covers all the tasks and features the MSP can offer, such as consulting, planning, testing, and optimization. It also guarantees the fastest and most consistent response and resolution times, regardless of the priority and severity of the issues. It also includes many proactive and preventive measures, such as audits, reviews, and improvements—this type of SLA suits businesses with high IT sophistication, service demands, and downtime consequences.

Each type of SLA has pros and cons, depending on your business needs and preferences. For example:

  • A basic SLA can save you money in the short term but expose you to more risks and costs in the long term if your IT environment changes or faces unexpected problems.
  • A standard SLA can balance your service quality and cost in the medium term, but it can limit your flexibility and scalability if your business grows or evolves.
  • A premium SLA can ensure service excellence and reliability in the long term but requires more investment and commitment upfront.

Therefore, you need to carefully weigh the benefits and drawbacks of each type of SLA before making a choice. You also need to consider some factors that may influence your decision, such as:

  • Your business size: Larger businesses tend to have more complex and diverse IT needs than smaller businesses.
  • Your business type: Different businesses have different IT priorities and challenges. For example, e-commerce businesses may value speed and availability more than manufacturing businesses.
  • Your business goals: Your IT strategy should align with your business objectives. For example, if you want to expand your market share or launch new products or services, you may need a more advanced or customized SLA.
  • Your business budget: Your IT spending should fit within your financial plan. For example, you may need a more efficient or economical SLA if you want to reduce your operational costs or increase your profit margin.

To help you decide which type of SLA is best for your business, you can use some tools or methods, such as:

  • Benchmarking: You can compare your current IT performance and costs with industry standards or best practices and identify any gaps or opportunities for improvement.
  • SWOT analysis: You can assess your IT strengths, weaknesses, opportunities, and threats and determine how they affect your business performance and goals.
  • Cost-benefit analysis: You can estimate the costs and benefits of each type of SLA and calculate the return on investment or payback period. Using these tools or methods allows you to have a more transparent and objective view of your IT situation and needs and make a more rational and informed choice.

Tips for Evaluating and Negotiating an SLA

Once you have decided which type of SLA you want to choose, you need to evaluate and negotiate the specific terms and conditions of the agreement with your MSP. This is a critical and delicate process, as it can affect your service quality, customer satisfaction, and profitability.

To help you evaluate and negotiate an SLA effectively, you can follow these tips:

  • Ask for a detailed and written proposal: You should request a formal and comprehensive proposal from your MSP outlining the scope, quality, and terms of the service they will provide. The proposal should include all the relevant information, such as:
    • The services that are included and excluded in the SLA.
    • The performance indicators and targets will be used to measure and ensure service quality.
    • The reporting, communication methods, and frequency will inform and update you on the service status and progress.
    • The resolution and escalation procedures will be followed to handle and resolve any problems or complaints.
    • The penalties or incentives will be applied for any breaches or achievements of the SLA.
    • The change management process will be followed to request and implement any modifications or updates to the SLA.
    • The termination clause will specify the conditions and consequences of ending the SLA.

You should review the proposal carefully and thoroughly and ask for any clarifications or corrections if needed. You should also compare the proposal with other offers from different MSPs to ensure you get the best value for your money.

  • Negotiate for a fair and flexible agreement: You should not accept the proposal but try to negotiate for a better deal that meets your needs and expectations. You should aim for a win-win situation where you and your MSP are satisfied with the outcome. You should also be prepared to compromise on some aspects if they are not critical or essential for your business. Some of the things that you can negotiate for are
  • The scope of the services: Depending on your IT needs and budget, you can ask for more or less services. For example, you can request additional services, such as training, consulting, or optimization, or exclude some services, such as backup, maintenance, or monitoring, if you already have them in-house or from another provider.
  • The quality of the services: You can ask for higher or lower performance standards, depending on your IT requirements and preferences. For example, you can demand faster or more consistent response or resolution times or accept slower or more variable ones if they do not significantly affect your business operations or customer satisfaction.
  • The agreement terms: Depending on your business situation and goals, you can ask for more favorable or flexible terms. For example, you can request lower or variable fees, longer or shorter duration, more frequent or less frequent reviews, easier or harder termination, etc.

To negotiate successfully, you need to have a clear and realistic idea of what you want and what you can offer. You also need to have a good relationship and trust with your MSP. You should communicate openly and honestly, listen actively and respectfully, acknowledge each other’s interests and concerns, propose solutions and alternatives, and seek mutual agreement.

Best Practices for Managing and Reviewing an SLA

After signing an SLA with your MSP, you must manage and review it regularly to ensure it works effectively and efficiently for your business. Here are some best practices for doing that:

Communicate effectively

Communication is key to a successful SLA. You should communicate frequently and transparently with your MSP to share feedback, report issues, request changes, or resolve conflicts. You should also use the appropriate channels and tools for communication, such as email, phone, chat, or ticketing systems. You should also establish a straightforward escalation process for urgent or critical matters.

Monitor progress

You should monitor the progress and performance of your MSP according to the metrics and indicators specified in the SLA. You should also use the reports and dashboards that the MSP provides to track and analyze the data and trends. You should also verify the accuracy and validity of the MSP’s data and reports.

Provide feedback

You should provide constructive and timely feedback to your MSP to acknowledge their achievements, appreciate their efforts, or suggest improvements. You should also encourage your MSP to provide feedback on how you can help them deliver better services or support.

Request changes

You should request changes to your SLA when necessary to adapt to changing business needs or circumstances. You should also follow the change management process that is defined in the SLA to ensure that the changes are approved, implemented, and appropriately documented.

Renew or terminate

You should renew or terminate your SLA when it expires or becomes obsolete. You should also follow the renewal or termination process defined in the SLA to ensure the transition is smooth and seamless.

Make the right choice

Choosing the best SLA for your business is a crucial decision that can significantly impact your IT performance, productivity, and profitability. It requires careful planning, evaluation, negotiation, management, and review. By following the tips and best practices we have discussed in this article, you can find an SLA that meets your needs and expectations while providing flexibility, reliability, and value.


About the author

Slobodan Krsmanovic, the CEO of TechProComp, brings over 25 years of deep-rooted experience in the IT industry. As the author driving our insightful posts, Slobodan embodies a steadfast commitment to client-centric service, fostering respectful and secure collaborations across all business scales.

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