• Inok Systems

SLA - what it means

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Everyone in the IT talks about SLA, lives by the SLA and meet up weekly to discuss on the SLA. Why is SLA so important and how did it come about? The secret behind the SLA is actually to the IT department’s favour. It’s all about setting customer’s expectation.

Imagine this Scenario where a customer walks into a café, ordered his coffee, waited for 15mins and it still wasn’t delivered. He got mad and started scolding the waiter. The waiter tried to explain that his order was a siphon coffee, and requires time to brew and stirred slowly to bring out the full flavour. The customer doesn’t accept the reason and think that any coffee should take less than 10mins to brew and storms out of the café. The café manager saw this and came up with an idea. He put up a sign on all tables saying:

“Siphon coffee orders are brewed upon order, which will take 15-20mins”

And thus, he successfully created his first Service Level Agreement (SLA) in his café. No other customers complained since then on.

Handling a customer’s expectation is important, especially in the IT world where the user never knew how much work is required on the backend just to fulfil their requests. SLA is to set the expectation balance between the service providers and their customers.

In the IT outsourcing environment, some SI's are measured by their SLA achievements and any breech in SLA might incur in monetary penalties.  This become a big deal and moer terms start coming in such as:

- KPI: Key Performance Indicator (non-critical SLAs but still used to measure against you)

- UC: Underpinning contract (contract SLA between you and your vendors)

- OLA: Operational level agreement (agreement between internal operations)

- SIP: Service improvement plan (just a better terminology where customers comes at the end of the year to squeeze you in case you passed last year's SLA)







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