Why Service Level Agreements (SLAs) Fail.

The business world, when it was just plain bartering, was relatively simple. I exchanged  my sheep for logs of wood and that was that.

Things got a little more complicated when money came along as there was a degree of promise involved; I pay cash for my new windows in the expectation that you will come along and install them.

Business was not immune; large sums of money exchanged hands for the delivery of services which (presumably) are agreed and detailed at the start of the contract. To make this work the Service Level Agreement was born and we rejoiced.

Possibly.

Any organisation has a whole host of SLAs that underpin commercial relationships for both products or services. In the main they work well as long as they are very carefully set out.

Many SLAs do not work well and for future planning the following reasons for Failure should be borne in mind:

  • Too few or inappropriate dimensions of performance
  • No mutually agreed targets for each dimension
  • Responsibility for measures not identified
  • No mechanism for reporting and discussion of performance
  • No procedures to deal with problems
  • Mutual benefits not discussed or delivered
  • No mechanism for discussion of measures or targets or to share ideas for improvement
  • Lack of commitment of managers from both parties to derive the benefits from the agreements

The remedy? Plan, Plan, discuss and Plan. Then Monitor.

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