A service level agreement (SLA) outlines how a managed service provider (MSP) will support its customers day after day, establishing the expectations for response times for service requests.

This agreement also serves as a legally binding contract, and as such, may protect an MSP against legal action. 

An SLA serves many purposes for an MSP and its customers, but did you know this agreement can deliver a key differentiator for a service provider as well?

Crafting an effective SLA requires hard work and patience to ensure the agreement can help your business differentiate itself in a crowded managed services marketplace, including:

1. Maintain a living document.

Customers' needs frequently change, and an SLA should serve as a living document that is reviewed and updated regularly to ensure customers' expectations of the MSPs can still be met.

"By treating an SLA as a living document and routinely reviewing and amending it, you'll be able to more easily diffuse tensions when problems arise. An SLA can be a powerful part of your relationship with your clients, but for it to be successful it must be built on a foundation of common understanding," Kevin Gibson, senior product manager at remote monitoring and management (RMM) software provider LabTech Software, wrote in a blog post

In addition, Gibson said, an MSP should outline all the data components needed to launch its SLA and leverage a best practices framework.

This empowers an MSP to take a "service-centric approach" to SLAs, Gibson said, and be sure its customers feel like they are a top priority at all times. 

2. Keep your SLA at the heart of everything you do. 

An SLA will define an MSP, and as a result, a service provider should establish realistic SLA guidelines to comply with this agreement consistently. 

By doing so, an MSP can avoid the danger of overpromising and ensure its customers' needs are met day after day. 

Also, an SLA represents a key building block in the relationship between an MSP and its customers, and a service provider that demonstrates a commitment to achieving SLA mandates can forge rich, enduring relationships with its customers.  

"Your [SLAs] are your promise, and they shape your professional reputation. If you're overpromising your work, word travels fast that you're the company to avoid. Taking on more than you can handle, or not meeting your agreements, will cost you new and current customers," Ron Williams, business success strategist at professional services automation (PSA) software provider ConnectWise, stated in a blog post. "Make it a priority to keep your SLAs at the heart of everything you do."

3. Plan for hybrid cloud migrations.

Hybrid cloud will become increasingly popular over the next few years, according to recent data.

Technology research firm Gartner has predicted nearly half of large enterprises will have hybrid cloud deployments by the end of next year, and MSPs that plan for hybrid cloud migrations now will be able to support their customers' hybrid cloud needs. 

"Enterprise IT teams have complete control over their resources and are able to define their SLAs according to the capabilities of their closed, on-premises domains," John Gray, senior vice president of business development at software analytics company New Relic, wrote in a blog post. "The introduction of the public cloud, however, breaks down traditional data center boundaries."

Gray also noted that one of the biggest challenges for SLAs in the hybrid cloud is "linking each of the hybrid cloud's underlying components to end-user experiences."

He pointed out that MSPs should establish guidelines for monitoring the boundaries between various platforms and aggregating, unifying and analyzing data from them. 

"Once an issue is identified and isolated, it has to be managed and administered throughout its life cycle, from the initial notification through remediation," he wrote. "Integrating modern monitoring solutions is crucial to bridge gaps between the different environments. If done right, you will be able to correlate between the functionality of every environment and application performance, making sure all parties are abiding by their SLAs."

How do you handle SLAs? Share your thoughts about this story in the Comments section below, via Twitter @dkobialka or email me at dan.kobialka@penton.com.

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