Limit the service level agreements (SLAs) you manage and track to those that you can align with business-impacting events.
Too often the impulse is to track everything you can as a service level with associated penalties to gauge the effectiveness of your providers against the costs of their services. The larger the number of service levels to which you ask your vendors to adhere and subject them to penalties when not met, increases your cost of service. But they may not in fact, if met, improve the value to your business. Limiting the number of SLAs you track and allocating higher percentages of your at-risk pool to penalties for those SLAs that, if missed, would impact your business, will focus and re-focus your provider’s behavior and improve your results.
Make broader use of KPIs.
Many organizations confuse a key performance indicator (KPI) with a service level. Resolve to review your current service level agreement framework to identify what you are tracking, to identify if you are really looking to track the way a service is delivered (KPI) versus the results of the service (SLA).
Your SAP system is down and the business cannot access its applications. This is often referred to as a Severity 1 Incident accompanied by 2 SLAs: One SLA for Response to the Incident and another SLA for Resolution to the Incident. The response to the Severity 1 Incident is an indicator that a process has been initiated and is better classed as a KPI. The resolution to the Severity, however, should remain an SLA as business resumption is critical.
Review your service levels quarterly with your internal business partners and your external service providers.
Monthly service level reporting is a key deliverable in every third-party support relationship. Reviewing those reports for accuracy and confirming results, penalties and earn-back amounts is also important. What sometimes gets lost in the day-to-day management is the chance to review what you are tracking, identify trends year-over-year and month-to-month, and take the opportunity to understand the impact the services have on your business.
Commit to a quarterly review first internally with your business partners on the value of the service they are receiving and then use that to inform and empower your discussions with your vendors. Take the time to challenge the results of the service you are getting. Discuss the root cause of service level deficiencies and share the impacts the services have on your business. Explore the opportunities to improve the services and allow for the opportunity to change your service levels to meet the ever-changing needs of your business.
Recognize good service and acknowledge it.
Commit this year to renew your efforts to find public ways to acknowledge good service from your providers. Nothing is more motivating and validating to your service provider teams than to acknowledge their performance and show your appreciation. Consider quarterly and annual awards to acknowledge top providers with a plaque with your logo, company branded tokens or personalized certificates of appreciation. Call out the team(s) that provide you superior services. Make it an event and deliver it in person where you can. The good will you generate by acknowledging superior service will keep a strong team motivated to continue to deliver for you.
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