Service Level Agreements (SLAs) are contractually binding conditions that document the performance standard and service quality agreed to between the bank and service provider. SLA is an important element in building a strong outsourcing contract. The SLA ensures that the institution receives the needed services at the required performance price and standard. The SLA is a principal element in managing the financial and operational risk associated with outsourcing contracts. It also can be one of the ways to assist in mitigating risk. By defining the measurement unit and service range for the chosen level, the risk of poor service may be reduced because it becomes an area of focus and is assigned as the service provider's responsibility.
SLA's principal goal is to define and explain performance expectations and to establish accountability. Hence, balancing the need for accurate measurement standards with adequate adaptability is crucial. A typical pitfall is an undue oversight or "micro-management" of the provider responsible for the service, which can make it difficult for the bank employees entrusted with overseeing the service provider relationship and monitoring the SLAs.
A well-designed SLA will identify and reward, or at the minimum, recognize good service. It will also present the measurement structure -- or metric for performance -- to recognize poor service and initiate revision or revocation provisions as approved. In the current outsourcing environment, incentives or penalties in the SLA can be an effective tool for managing service. If services received do not meet the requirement, direct outcomes, such as decreased levels of compensation or a credit on future services, would follow.
What should be included in SLAs?
Service Level Agreements (SLAs) - Preparation Guidelines for Effective SLAs
This 2-hr webinar on Service Level Agreements (SLAs) will provide you with sound principles and a set of guidelines for developing and preparing ‘effective’ Service Level Agreements (SLAs) for an internal service function or an outside service provider.
Preparation Guidelines for Service Level Agreements
This training session will provide the guidelines to formulate effective SLAs for services needed for all support areas (Accounting, Human Resources, Information Technology, Supply Chain, etc.) whether the support is provided internally or external (outside) service providers.
Establishing a Service Level Agreement (SLA) Process
An SLA - which can be a legally binding formal or informal contract between two parties, must comply with operating norms, which describe how the process is governed, managed, and controlled. In this webinar we will provide you with critical information on SLA process.
Successful 3PL Relationships - Managing with Service Level Agreements and Key Performance Indicators
This training program will explore how using service level agreements along with key performance properly will enable a shipper to drive continuous improvement in their supply chain.
Best Practices: Defining a Service Level Agreement (SLA) Process
This webinar will provide attendees with a comprehensive roadmap for implementing the SLA process. Developing SLAs involves the definition of service level requirements and related metrics.
A Risk-Based Methodology to Develop and Prepare an Effective Service Level Agreement (SLA) Package to Improve Service and Security Quality
This training program will illustrate a structured methodology to develop effective service level agreements based on a top-down, risk-based approach, summarized in a matrix that documents the whole development process for specific SLAs that respond to business objectives.
