GUIDANCE NOTE

An Introduction to Service Level Agreements (SLAs)Published by the Institute of Workplace and Facilities Management (IWFM)December 2017

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Introduction

A Service Level Agreement or SLA is an excellent toolfor managing discrete packages of works or services. They are normally agreed between a service receiver – customer; and a service deliverer – supplier.

The purpose of this brief Guidance Note is to give some simple and practical suggestions to help both Customers and Suppliers, and is based on live experience in the workplace.

Guidance Note

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An Introduction to Service Level Agreements (SLAs)

What is the purpose of an SLA?

To clearly set out the terms for the management ofa service agreed between the Customer and Supplier. Done well, it will define the service objectives and manage the expectations of both parties. It may be simple and informal or complex and part of a legally binding agreement, in either case it should clearly define the service, the performance standards required and the consideration (payment or service credit).

What are the key criteria?

First and foremost it should be simple to understand- whilst a SLA may support a wider contract it should not in itself be written in legalese. It needs to accurately reflect the service being delivered and should be drawn up by both parties in plain English. It is often the discussion that takes place in seeking acceptability to both parties that actually has more value than the document itself, as it brings out key concerns, risks, structures attitudes and minimises misunderstandings. Finally it should be signed by both parties as a WIN WIN agreement i.e. both parties should believe they are benefitting fairly from it and in equal proportion.

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Guidance Note

If possible, a team leader should be appointed and a scoping team identified, with roles and responsibilities clearly identified and understood. The data capture methodology should also be decided. This process can be a collaboration between the Supplier and the Customer as both parties need to agree the final output.

The collection of data will form the basis for the development of the SLA.

It should not be an over-complicated process but it can be time consuming.

Some businesses find it useful to employ external organisations to manage or undertake this process particularly where either the resource, expertise and experience are not available in-house, or an independent, objective approach is required.

Consideration must also be given to parameters that can affect the business (eg a material change in the customer’s requirements from the original specification).

Identify the implications of variation of service levels, both positive and negative and consider whether these will drive any need for changes to policies and/or working practices.

Establishing the scope

The scoping exercise should identify service options and select the most appropriate ones based upon influencing factors, such as;

• Budgets• Resources• Time• Management skills• Quality management• Service recipients requirements• Business needs

The scoping process should involve internal users, key stakeholders and the service providers themselves; it should have dedicated leadership with a clearly defined strategy focused on the outputs to be achieved, which will generally be some or all of the following:

• Customer satisfaction• Stakeholder needs• Service delivery targets• Health and Safety• Sustainability

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An Introduction to Service Level Agreements (SLAs)

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Guidance Note

Version / Quality controlMaintain a version control box with the following information:

Outline description of the serviceLimited to the title and key activities - no more than a couple of lines.

Service ObjectivesThese should use SMART criteria;

• Specific – target a specific area for consideration• Measurable – quantify indicators of success• Achievable – agreed upon, attainable, acceptable• Realistic – relevant, reasonable, within

available resources• Time-related – specify when the result(s)

can be achieved.

They should be limited in number (ideally 6 to 10), reflect the key activities and be aligned to corporate goals.

What should the SLA include?

Version Number Date of version Key information on changes from previous version Who has updated

0.1 1st October 2017 Ist Draft JR/WS

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An Introduction to Service Level Agreements (SLAs)

The scope of the service

N.B. The scope should also detail any dependencies one party has on the other especially in relation to equipment, utilities, leases or novated contracts that may be essential for the successful delivery of the service.

Objective Performance Measures and reportingA set of criteria that link the monitoring of the scope of services to the service objectives should be developed.

Area of service

What is to be delivered?

Standard to be delivered

How will we know if it has been achieved?

Frequency of service

How often or over what time period?

Monitoring process

Who will monitor, how and how often?

These may be expressed as Key Performance Indicators (KPIs), and should include the frequency and standard of reporting and the parties who will need to sign off the performance levels achieved.

See IWFM Guidance Note “Measuring Contractors Performance Using KPI’s” for more information on performance measurement and reporting.

Timescale and Review processStatement of the time frame in which the SLA will operate and the criteria under which a review can or should take place.

The price / consideration given in return for the serviceThe price may be expressed as a single rate or a schedule of rates. They may be linked in part or in whole to the Objective Performance Measures or KPIs.

Supplier and Customer contact detailsWho are the key contacts for both parties including key operatives and line managers?

The governance of the serviceThe following areas should be included:

Escalation procedures and dispute resolution.This should be initially through the line management structure for both parties or through a willing and knowledgeable independent third party whose decision should be considered as final and binding on both parties.

Change control process. Under what circumstances can any changes to the SLA be adopted, any notice period, and the process for recording and adopting the proposed changes.

Termination terms. Under what circumstances the SLA agreement may be terminated (other than the natural conclusion of the agreement).

Any notice period and consideration / penalties that may be sought. It should also include the process for returning data and for re- assigning operational equipment, leases and contracts upon which the continuation of the service may be dependent.

This may be included in the text or as an appended table. It must set out the core service requirements and standards to be delivered. It should effectively be the service specification and contain the following:

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Guidance Note

What may the SLA include?

Conclusion

We hope you find this guide useful and remember:

• A good SLA will be developed jointly between the customer and supplier who has to deliver it

• The greatest value in developing an SLA is the dialogue that will help shape understanding and expectations on both sides

• It should be simple to understand with limited legal or technical jargon

• It should provide a WIN WIN for all parties

An example of an SLA template is provided on the following pages for reference

In addition to the above it may be helpful and/or appropriate to include the following sections

• Business Continuity Plan - Especially where the service is deemed as business critical in the risk assessment

• Risk register• Scope of additional /call off services• Additional price structures / Schedules of rates• Project plan (Gantt Chart)• Stakeholder impact assessment - Review of impact

on secondary stakeholders e.g. users, customers, suppliers

• Health and safety impact statement• Sustainability impact statement• Diversity impact statement

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An Introduction to Service Level Agreements (SLAs)

Annex AService Level Agreement (SLA) template

SERVICE LEVEL AGREEMENT (SLA)for Customer

by Company name

Effective Date:

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Guidance Note

1. Agreement Overview This Agreement represents a Service Level

Agreement (“SLA” or “Agreement”) between Company name and Customer for the provisioning of IT services required to support and sustain the Product or service.

This Agreement remains valid until superseded by a revised agreement mutually endorsed by the stakeholders.

This Agreement outlines the parameters of all IT services covered as they are mutually understood by the primary stakeholders. This Agreement does not supersede current processes and procedures unless explicitly stated herein.

2. Goals & objectives The purpose of this Agreement is to ensure that

the proper elements and commitments are in place to provide consistent IT service support and delivery to the Customer(s) by the Service Provider(s).

The goal of this Agreement is to obtain mutual agreement for IT service provision between the Service Provider(s) and Customer(s).

The objectives of this Agreement are to: • Provide clear reference to service ownership, accountability, roles and/or responsibilities. • Present a clear, concise and measurable description of service provision to the customer. • Match perceptions of expected service provision

with actual service support & delivery.

3. Stakeholders The following Service Provider(s) and Customer(s)

will be used as the basis of the Agreement and represent the primary stakeholders associated with this SLA:

IT Service Provider(s): Company name (“Provider”) IT Customer(s): Customer (“Customer”)

4. Periodic Review This Agreement is valid from the Effective Date

outlined herein and is valid until further notice. This Agreement should be reviewed at a minimum once per fiscal year; however, in lieu of a review during any period specified, the current Agreement will remain in effect.

The Business Relationship Manager (“Document Owner”) is responsible for facilitating regular reviews of this document. Contents of this document may be amended as required, provided mutual agreement is obtained from the primary stakeholders and communicated to all affected parties. The Document Owner will incorporate all subsequent revisions and obtain mutual agreements / approvals as required.

Business Relationship Manager: Company name + Nominated person

Review Period: Bi-Yearly (6 months) Previous Review Date: 01/10/2017 Next Review Date: 01/04/2017

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An Introduction to Service Level Agreements (SLAs)

5. Service Agreement The following detailed service parameters

are the responsibility of the Service Provider in the ongoing support of this Agreement;

5.1. Service Scope The following Services are covered by

this Agreement; • Manned telephone support • Monitored email support • Remote assistance using Remote Desktop

and a Virtual Private Network where available • Planned or Emergency Onsite assistance (extra costs apply) • Monthly system health check

5.2.Customer Requirements Customer responsibilities and/or requirements

in support of this Agreement include: • Payment for all support costs at the agreed interval. • Reasonable availability of customer representative(s) when resolving a service related incident or request.

5.3. Service Provider Requirements Service Provider responsibilities and/or

requirements in support of this Agreement include: • Meeting response times associated with service related incidents. • Appropriate notification to Customer for all scheduled maintenance.

5.4. Service Assumptions Assumptions related to in-scope services and/or

components include: • Changes to services will be communicated and documented to all stakeholders.

6. Service Management Effective support of in-scope services is a result

of maintaining consistent service levels. The following sections provide relevant details on service availability, monitoring of in-scope services and related components.

6.1. Service Availability Coverage parameters specific to the service(s)

covered in this Agreement are as follows: • Telephone support : 9:00 A.M. to 5:00 P.M. Monday – Friday • Calls received out of office hours will be forwarded to a mobile phone and best efforts will be made to answer / action the call, however there will be a backup answer phone service • Email support: Monitored 9:00 A.M. to 5:00 P.M. Monday – Friday • Emails received outside of office hours will be collected, however no action can be guaranteed until the next working day • Onsite assistance guaranteed within 72 hours during the business week

6.2. Service Requests In support of services outlined in this Agreement,

the service provider will respond to service related incidents and/or requests submitted by the customer within the following time frames:

• 0-8 hours (during business hours) for issues classified as high priority • Within 48 hours for issues classified as medium priority • Within 5 working days for issues classified as low priority

Remote assistance will be provided in-line with the above timescales dependent on the priority of the support request.

The Institute of Workplace and Facilities Management (IWFM) is the body for workplace and facilities professionals.

We exist to promote excellence among a worldwide community of over 17,000 and to demonstrate the value and contribution of workplace and facilities management more widely.

Our Mission: We empower professionals to upskill and reach their potential for a rewarding, impactful career. We do this by advancing professional standards, offering guidance and training, developing new insights and sharing best practice.

Our Vision: As the pioneering workplace and facilities management body, our vision is to drive change for the future. To be the trusted voice of a specialist profession recognised, beyond the built environment, for its ability to enable people to transform organisations and their performance.

The IWFM was established in 2018. It builds on the proud heritage of 25 years as the British Institute of Facilities Management.

This document was produced by the IWFM Procurement Special Interest Group (SIG). Further information on the Procurement Special Interest Group can be found on the website at www.iwfm.org.uk

While all due care is taken in writing and producing this guidance note, IWFM does not accept any liability for the accuracy of the contents or any opinions expressed herein.

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