The Service Provider’s Side: Advantages and Disadvantages of Service Level Agreement Cited

The service level agreement or SLA is a document that defines and identifies the various services given by a service provider to its clients. If used properly, it will be a win-win situation to both parties involved. However, certain conflicts or disputes might arise along the way. As the service provider, there are some things that should be considered to make sure that everything is under control. In every given situation, the provider can either gain an advantage or disadvantage in coming up with a service level agreement.

Since the SLA provides the terms and conditions that define the services rendered by a provider, it then limits its scope of support, therefore minimizing production cost. A very good example would be on outsourcing. An outsourcer may only provide the support needed by the client’s customer inquiries as far as technical issues are concerned. However, this does not include marketing, billing, saves or retention as this may be the client’s responsibility already. The hours of operation are also another good example. If in case the client experiences some system issues, the outsourcer can then extend its hours of operation to give way for more customer support. Additional benefits will then be given to the outsourcer’s employees.

However, if all of the conditions were not met, this also means loss to the provider. Though there could be external factors like bad weather conditions, still it is the provider’s responsibility to make some adjustments. The provider can then make settlements like free hours of service or payment refund so as to compensate with the provider’s inability to meet client’s needs.