How to Create an SLA in 7 Easy Steps

You might be wondering about an easy way to improve satisfaction of your users from the services you deliver. Well, you need to match their expectations and your ability do deliver. You can do it by creating a Service Level Agreement (SLA).

I'm not a lawyer. If you read it, chances are, you are not one either. However, you don't need to be, because creating an SLA can be a relatively easy activity. You can and should keep it simple, following my advice on Change Management. You can always expand it later.

Define the Service

First, pick a service for which you want to create the SLA. That might be your sales application, or your logistics system. Pick the one of the most important systems in the company. Define one sentence which describes the nature of the service you provide. So, for a sales system the statement could be:

"Provision of IT sales system X to the company."

Find Out What You Can Measure

The next step is to determine what kind of service attributes can actually be measured by your team. This is a pragmatic approach. There is no point promising something, which cannot be measured and improved in a visible way. List all the parameters you can measure and prepare for discussing them with the business owner.

Identify the Business Owner

I mentioned the business owner, but how to find this person? Sometimes it is quite obvious. If a sales system is your subject, you should talk to your Sales Director. Sometimes, it might be more tricky. What if you have more than one candidate, like two Sales Directors responsible for two different sales channels? Do you talk to the General Manager? Maybe. You might also get your directors to agree and appoint one delegate manager from the team, who will represent them both. Or just talk to them both and reach a consensus.

Sometimes you might have a really hard time finding an owner. There might be cases, where ownership is deemed to reside in IT. Systems "should work" and if they don't, "IT should fix them". What's to talk about? In such situations, there are a couple of things you can do:
  • Pick another service, with more natural ownership within the business. Payroll system is a better candidate than email. You will later use it as an example in an attempt to instill more ownership within the business.
  • Consider a customer-based SLA, prepared for one particular department, but multiple services together.
  • Prepare a Service Level Standard. This is essentially an SLA provided unilaterally by you, without formal business sign off. It can be converted to an SLA later if a business owner emerges.
Define Business Needs and Metrics

Now, organize a meeting with the business owner. Present the service you want to provide and find out more about business expectations. Present the metrics which you can track, and allow the business owner to pick a few, which are crucial to business performance. Be ready to provide recommendations.

Those metrics could be really fancy, but for starters, I would recommend picking just two:
  • system availability during business hours (define what those are)
  • incident resolution time during and after business hours
If you cannot track those two, seriously consider upgrading some of your ITSM software, and for the time being propose some other relevant measures.

Prepare the SLA Document

Now you are ready to prepare the actual SLA document. Make it very brief and understandable -- not more than two pages. Bullet points are your friend. The simpler it is, the easier it is to get it implemented and improved upon later. I definitely advise to follow this rule for the first very SLA in your company.

Later on the documents tend to become more sophisticated. It goes together with the maturity of Service Level Management within the company, both on the IT side and on the business side. 

Obtain Approval 

After you document is ready, hold another meeting to have it formally approved. You don't need to physically
sign it, although it has some symbolic touch to it. You could also have the approval done through email if both sides consider it a mere formality and there are no further questions to be answered.

Obtain Baseline and Set Targets

Notice that I have not mentioned any targets yet. This is because you need to measure your service for a some time (couple of months) in order to see what targets are realistic. After a set period of time, hold your first service review meeting, during which you will present results of your service provision.

On this meeting, you should also agree the minimum service levels with your business owner. Going below minimum causes your business owner's operations to suffer and should be avoided at all costs. If it happens, you should prepare and present an improvement plan on the service review meeting.

Now go and make it happen. If you have any questions, let me know. Good luck!


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