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...of the parties
* guarantees, warranties and compensation. This section considers the level of reparation, and procedures for dispute handling and escalation
* maintenance of the agreement and exit clauses. This section looks at revising SLAs and devising get-out clauses. This includes changes made as a result of changing regulations, standards or other external factors.
In Chapter 3 we look at how the type of customer affects the detail of the SLA.
2.1.2 General clauses of SLAs
The general clauses of an SLA should include:
* an opening statement
* a description of the parties involved
* the duration and validity of the agreement
* the responsibilities of the parties involved.
Opening statement
This should set out the objectives of the SLA. The objectives for the operator may initially be different from those of the user. Any disparities must be ironed out and clarified at an early stage.
Parties involved
A description and the name of the legal entities involved in the SLA and the responsible persons should be included. It is extremely important that this is accurate and exact.
For example, large companies may have a number of divisions. If the SLA only applies to one part of the company then this needs to be carefully stated, otherwise the operator may find itself in a situation where the agreement is taken to apply to the whole company when this was not the intention.
Duration and validity of the agreement
The contract period should be stated, and this section should include clauses about validity and termination of the contract. If applicable, a clause should be included about the transfer of rights and obligations to third parties.
The shakeout that has happened in the telecoms industry in 2001 and 2002 has resulted in many companies either failing or being absorbed by rivals. The agreement should include fall-back arrangements for this eventuality.
Responsibilities of the parties involved
This should include a description of the responsibilities of the parties involved, such as the obligation to notify each other about (upcoming) changes or malfunction, for example.
This will vary according to the type of customer. In general terms, the customer must agree to have the appropriate terminal equipment to receive the service, or agree to obtain this from the company providing the service. For some services, it may be necessary for the customer to grant permission to the operator for its staff to enter the customer's premises, and for the customer to ensure that a member of staff is available when the operator's staff call.
The SLA should include a section detailing how customers should make claims against the SLA for non-compliance. There are varying approaches to this, which will be appropriate to different types of customer:
* by application form--for example, BT's Customer Service Guarantee claim form is attached to the booklet explaining the terms and conditions of the customer service guarantee
* via a telephone conversation in which the customer service representative logs all the details
* through a complaint made at a retail outlet.
Clear instructions should be provided on the procedures and contact telephone numbers and addresses given. Some methods of making a claim will involve less cost to an operator and will enable them to deal with the complaint more quickly. Depending on the customer type, and the likelihood of complaints, some methods may be more scalable than others. For example, a major fault that affects a large number of customers is going to be difficult to address via calls to the call centre. In this case, an online form or automated system will be extremely important in helping to log and deal with complaints. However, operators may wish to proactively call major customers to explain to them what is being done to fix the fault and what compensation is applicable.
Operators should also provide information about how long after the event claims are permissible. Operators vary significantly in the terms they offer in this area; for example:
* Telstra of Australia allows claims up to two years after the event
* BT allows claims up to four months after the event
* Kingston Communications only allows customers to claim for one month after the event.
Here the operator has to assess the impact on its business that delayed claims will have. Until all the claims have been assessed and settled, it cannot analyse the cost to its business of a particular fault. Understanding the impact on the business is becoming increasingly important, as unexpected costs can have a highly detrimental effect on operators and because the effectiveness of the SLA cannot be determined until the total cost of offering it is assessed. For example, the cost of paying out against an SLA may be higher than upgrading part of the network to provide a better level of service. This investment decision cannot be made until the total cost of compensation paid out is known.
Chorleywood Publications would therefore recommend that operators seriously consider the effect of offering long claim periods and opt for a three to four month period as the maximum allowable. After all, it is always possible to use discretion to allow late claims by important customers.
2.1.3 Guarantees, warranties and compensation for breach of SLAs
A description of the bonus or penalty model in case of non-compliance with the agreed service delivery is an essential part of a service-level...
NOTE: All illustrations and photos
have been removed from this article.
More articles from How to Write Service Level Agreements for Next Generation Services
Chapter 4: SLAs for different types of customer., October 01, 2002
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