A carefully constructed SLA is a critical component of any telecom expense management (TEM) contract. If your TEM provider's SLAs aren't working in your best interest, then you could be missing out on cost-savings, support, and the quality of service you expect.
What is an SLA?
A service-level agreement (SLA) specifies the level of service you expect to receive from your telecom vendor. SLAs form an important part of IT vendor procurement contracts by compiling all relevant information on contracted services and the expected outcomes into a single document.
They clearly define metrics, responsibilities, and expectations – so if any issues arise or agreements are breached – the relevant party can be held accountable.
A typical SLA will contain:
- Descriptions of the services required
- The metrics used for measuring their success
- An outline of the duties and responsibilities of each party
- Penalties for breach of agreed terms
The Key Components of an SLA
An effective SLA should include components in two key areas: management and services.
For management, you should look to include definitions of measurement standards, reporting processes and their frequency, dispute resolution procedures, and any necessary clauses that protect you in the event of a service level breach.
For services, you'll need to include details on services provided, availability, responsibilities of each party, escalation procedures, and costs. Everything must be set out as clearly and definitively as possible, to avoid confusion on either side.
Service requirements, management processes, and vendor capabilities may change, so ensure SLAs are kept up-to-date and relevant at all times.
Why Are SLAs Important?
SLAs set boundaries and expectations. They clarify measurement guidelines and ensure you and your provider are on the same page in terms of contractual standards and service.
Gartner previously commented on the importance of SLAs in ensuring continued vendor performance in achieving positive outcomes. They highlighted the need for sourcing managers to ensure that their TEM contracts include detailed performance-based SLAs, which are often missed from contracts with less established TEM vendors.
Best Practices for SLAs
To get the most out of your TEM provider, your SLAs need to work for you, not against you. They should motivate the right behavior from your provider, measure performance on mutually dependent actions, and be clear and concise.
Here are some best practices for negotiating SLAs and effective performance metrics as part of a TEM contract.
Make the Metrics You Measure Motivate the Right Behavior
If your business is looking to work with a service partner, then your TEM contract needs to include performance-based service-level agreements to ensure your deliverables are fulfilled.
Your SLAs must be positioned with your internal teams and created with their performance in mind. This means existing response, payment, and processing timelines need to be considered when agreeing on terms and measurables with your TEM vendor.
For long-term success, the agreed performance metrics should be aligned with your TEM providers internal targets. This will ensure that they are actively incentivised to help you meet your goals, not only at the beginning, but throughout your contract term.
Make SLAs Two-sided
Measuring performance on mutually dependent actions is a good way to focus on the intended results and build stronger working relationships.
Other vendors may separate internal targets with external SLAs, but the best TEM vendors will intertwine them together and measure their own success based on the success of the customer.
Less is More
Lastly, avoid choosing an excessive number of metrics, or metrics that produce a large amount of data that will be difficult to analyze.
It's much better to have fewer clearly-defined and easily measurable performance indicators than a large amount of difficult and confusing ones.
Decide what results, improvements, and optimizations matter most to your business, and build your SLAs from there.
Why You Should Examine The Relationship With Your Existing TEM Provider
In Gartner's 2020 Market Guide for Telecom Expense Management Services, one of the key takeaways was the importance for businesses to evaluate the performance of their chosen TEM vendor against future demands.
Gartner highlighted why it's essential to ensure that a vendor has the resources and expertise to meet technical and functional requirements for the long-term. The right TEM provider should be able to provide a roadmap for future development that goes beyond simple service delivery.
Going forward, organizations need to closely examine the operational quality of their existing TEM provider and compare this performance against existing SLAs, as evidence that they can support improvement over time.
If the relationship with your TEM provider has started to falter or your contract is up for renewal, it's worth evaluating your requirements, scrutinizing your current provider, and looking for a vendor that can satisfy long-term development.
Find the Right TEM Vendor For You
To get the most out of your TEM provider, your service-level agreements need to work in your best interest.
Working with an experienced telecom expense management provider can ensure that they’re transparent, detailed, and aligned to your success.
To discover how Cass can help you find the vendor that is perfectly suited to your needs, download our brochure now.