Ask an MSP Expert

Q: We recently transitioned to the managed services model, and want to make sure we’ve covered our bases when it comes to monthly contracts. Are there any best practices you can offer for creating a Service Level Agreement (SLA)?

Service Level Agreements (SLA) are a great tool to help make sure you and your customers are on the same page. They can help you highlight what your managed services entail and set expectations for all parties involved. This means detailing what is included in the customers’ service as well as what options might be extra; for example, you might include managed service support during the week but have an additional charge for clients on the weekend. The terms should be clear – no matter what side of the agreement you are on.

To outline some best practices for creating an SLA, we consulted Scott Bennett, the Director of North American partner management at Barracuda MSP. While Scott was able to provide some guidelines to help you get started, you should always have an attorney assist you in developing a Service Level Agreement. Here are some best practices to keep in mind as you get started:

Set yourself up for success

To create an effective SLA, one of the most important things is to make sure you set clear expectations by being as specific as possible from the start. While you may want to customize your SLA for each customer you bring onboard, it is important to set clear expectations for everyone who is involved. If you don’t have an SLA, you have nothing to fall back on in the unfortunate case that something goes wrong.

As a legal best practice, have an attorney assist you with the creation of your SLA. This is extremely important, because an SLA is a legally binding agreement. Once your SLA is  created and signed, it can be used as a reference point for either party. If the requirements aren’t met, this can be used either to your advantage — or disadvantage — so having an attorney involved is essential for closing possible loopholes and making sure everything is set up properly.

Think before you commit

When it comes to what you can offer for your customers, share the performance standards that you and your team are committed to deliver. How soon can you and your technicians respond to a crisis? When can customers reach you on the support line? In your SLA, you may say that your response time might will be X hours, but you should give yourself a little leeway in case something goes wrong. 

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Think through each piece and process that can impact your customers. For example, how far in advanced will they be notified of maintenance or changes that will affect users? Most SLAs highlight uptime and availability or when services are available, and some  even go so far as to say they guarantee 95.5 percent uptime for their customers. Be careful when you make bold promises in your SLA – it is always better to under-promise and over-deliver.

Highlight the time it might take to get customers’ up and running

An SLA can also specify out how much time you’ll spend on an account, and most SLAs from MSPs include an RPO and RTO. If something were to happen, how old are the files that they would need to recover? Is it business critical that they have files from an hour or two ago? This determines if your customer’s data get backed up every hour, every night, or every week. Be mindful of your vendor’s SLAs when you are creating your agreement. Can your backup vendor help you meet the requirement times you are promising?

As a best practice, have more than one backup completed within your RPO time-frame. This way you can still deliver on your promise even if there are errors in one of the backups. Before signing on the new client, make sure that you can meet your commitments if a disaster recovery situation occurs.

Everyone plays a role in a successful service level agreement

While an SLA does a great job outlining what you do for your client, it is also an agreement on what you expect from them. For example, some MSPs specify that their customers are responsible for leaving their laptops on at the end of the night so that backups can take place. With cyber threats becoming more sophisticated, you may even want to require your SMB’s employees to complete a yearly security training course.

Another thing you want to be clear on is payment. What is the rate you’ll charge, and when will payments be due? If a customer doesn’t pay in so many days, will you try an alternate credit card you have on file? Will you suspend accounts after 60 days of missing payments?

Having this spelled out in your SLA will help you determine where the line is. While you don’t want to lose a customer, you don’t want to keep providing them services that they aren’t paying for. Sometimes when you’re dealing with a difficult customer you need to be tough, and having your payment policy spelled out can make your job easier.

Using these best practices will help you create an SLA you can use with your customers. While creating an SLA can be time consuming, outlining clear expectations for the relationship with your clients will be well worth it.

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Photo:  Jirapong Manustrong / Shutterstock.

Lauren Beliveau

Posted by Lauren Beliveau

Lauren is a Senior Content Marketing Specialist at Barracuda MSP. In this position, she creates and develops content that helps managed service providers grow their business. She also regularly writes The MSP’s Bookshelf and our Ask an MSP Expert column.

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