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QUESTION

In the administration of facilities management, why should there be need for services level
agreement? And when should these agreements be administered?

ANSWER

What is service level agreement?

Service level agreement refers to a document that outlines a commitment between a service
provider and a client, including details of the service, the standards the provider must adhere to,
and the metrics to measure the performance.

These contracts ensure customers can expect a certain level or standard of service and specific
remedies or deductions if that service is not met. SLAs are usually between companies and
external suppliers, though they can also be between departments within a company

What are the three types of SLA?

1. Customer SLA is an agreement between an organization and a third-party vendor providing a


service. For example, an organization might hire an office supply company or a design agency to
fill specific business needs.

2. Internal SLA is an agreement between teams within an organization. For example, the sales
team might enlist the marketing team for support in generating leads.

3. Multi-level SLA is an agreement between multiple parties, such as an organization and


multiple vendors, more than two teams within an organization, or a vendor providing services
to customers with different service plans. For example, sales and marketing teams within an
organization might find they need to enlist the help of a third team—customer support—to
improve customer satisfaction.

Key components of a Service level agreement:

Although Service level agreements can vary across industries, vendors, and types of services rendered,
there are several key components of a standard service level agreement:

Agreement overview

A list of stakeholders
The goals of all stakeholders

A description of services

Service levels

A list of services excluded from the agreement

Conditions of cancellation

A plan if goals aren’t reached

Service performance metrics

Service level agreements (SLAs) are essential in facilities management for several reasons:

Clarity and Expectation Setting: SLAs outline the specific services to be provided, performance
expectations, and responsibilities of both the service provider and the client. This clarity helps
prevent misunderstandings and ensures that both parties have a shared understanding of what
is expected.

Quality Assurance: SLAs establish performance metrics and standards, ensuring that services
meet the desired level of quality. This helps maintain consistency and reliability in facility
management operations.

Risk Mitigation: By clearly defining responsibilities and expectations, SLAs can help mitigate risks
associated with service delivery. They provide a framework for resolving disputes and
addressing issues that may arise during the course of the agreement.

Cost Management: SLAs often include provisions for cost management, such as pricing
structures, penalties for non-performance, and incentives for exceeding performance targets.
This helps ensure that services are delivered efficiently and cost-effectively.

Service level agreements (SLAs) should be administered at several key points:

Initial Agreement: SLAs should be established and agreed upon during the initial negotiation and
contracting phase between the service provider and the customer. This ensures that both
parties have a clear understanding of the expected service levels and responsibilities from the
outset (Bertolino, 2010).

Regular Reviews and Updates: SLAs should be reviewed and updated regularly throughout the
duration of the agreement to ensure that they remain relevant and aligned with the evolving
needs of both parties. This may include periodic performance evaluations, reassessment of
service levels, and adjustments to the agreement as necessary (Cirillo et al., 2019).

Significant Changes: SLAs should be revisited whenever there are significant changes in the
scope of services, operational requirements, or business priorities. This ensures that the
agreement reflects any changes that may impact service delivery or performance expectations
(Bertolino, 2010).

By administering SLAs at these key points, both service providers and customers can
ensure that the agreement remains effective in driving the desired outcomes and
maintaining a mutually beneficial relationship.

References:

Bertolino, A. (2010). "Software Testing Research: Achievements, Challenges, Dreams." In


Software Testing: Testing Across the Entire Software Development Lifecycle (pp. 123–146). John
Wiley & Sons, Inc.

Cirillo, C., F. Serpiello, L. Xu, D. Lauria, F. Berto, and A. Meroni. (2019). "A Service Level Agreement-based
Framework for the Design and Implementation of Smart Office Environments." In Proceedings of the 1st
International Workshop on Software Engineering for Smart Cyber-Physical Systems (SEsCPS ’19), 1–10.

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