Ask an MSP ExpertQ: We recently started transitioning to managed services from a break-fix model, and we want to make sure we’ve covered all the bases when it comes to switching customers over to monthly contracts. We’re currently in the process of drawing up a standard Service Level Agreement that we can tweak depending on a customer’s specific needs. Do you have any best practices you can offer for creating an SLA?

Congratulations on transitioning to become an MSP. It’s certainly a big step in developing your business. Creating a standard service level agreement (SLA) will certainly help set some ground rules so your customers know what to expect going forward.

To outline some best practices for creating an SLA, we consulted one of Intronis’ Partner Success Managers, Abbey Greene Barr. Although Abbey suggests having an attorney assist you in developing a Service Level Agreement to fit the needs of your MSP, she gave us some best practices that everyone should employ when creating the shell of an agreement.

Set yourself up for success

Having an SLA in place is the best thing you can do is to get your customers on the right track because it sets clear expectations for everyone involved. If you don’t have an SLA, you have nothing to fall back on in the unfortunate case that something goes wrong.

signatureAs a legal best practice, have an attorney assist you with the creation of your SLA. Your SLA has to be exact enough to be a legally binding agreement, so details are a necessity. Once it is created, it can be used as a reference point for either party. If the requirements aren’t met, this then can be used either to your advantage—or disadvantage—in court, so having an attorney involved is essential for closing possible loopholes and making sure everything is set up properly.

Keep expectations clear

It is critical to keep your SLA as detailed as possible. One thing you want to be sure to include would be the responsibilities of each party. What should your client expect from you, and what do you expect from your client? Spelling this out helps define the relationship and exactly what’s included. Will you offer your client emergency support? If so, is it only three hours of emergency support a month or nine hours a year? If the emergency goes over the X hours of support, map out what happens next. It could be as simple as charging them a standard per hour fee. 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. An SLA could even outline a yearly training course that every employee needs to go through.

In the SLA, you should also be clear about 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 that line is. Although you don’t want to lose a customer, you don’t want to keep providing them services that they aren’t paying for. Unfortunately sometimes when you’re dealing with a difficult customer you need to be tough, and having this spelled out can make your job easier in those types of situations.

In your SLA, you should also highlight performance standards as well as general reporting metrics. What performance standards are you offering your customers and how will it compare to the actual time? In your SLA, you may say that your response time will be in X hours, but you should also highlight any leeway you might have for response time. You should also highlight uptime and availability or when services are available; for example, some SLAs go so far as to say they guarantee 95.5 percent uptime for their customers.  How far in advanced will they be notified of maintenance or changes that may affect users?  Point out what general reporting metrics you will use such as usage, number of tickets open, anything else you will measure for them.

Highlight the time commitment

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. RPO is the recovery point objective, how frequently backups will occur. In other words, the RPO is the maximum amount of time that can pass between backups that is acceptable to the client. 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.

Make the RPO reasonable so you’ll be able to meet this requirement, and if something were to happen you can get them back up and running to the last recovery point. 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. It is better to under promise and over deliver then to fault on your SLA.

RTO is the recovery time objective or how long it will take to recover the data and restore. Typically the shorter time frame to recover, the more expensive it is. Depending on your internal resources, it could take a week for the data to be fully restored from their backups. If the information is business critical, the more important it is to have short RPO/RTO.

Someone who relies heavily on their data might already have specific RPO and RTO requirements when they come to you. Before signing on the new client, you’d need to make sure that you would be able to meet these commitments if a disaster recovery situation did occur.

Using these best practices from Abbey 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. Having a mutual agreement to fall back on will help deter problems and make your MSP run more smoothly.

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Lauren Beliveau

Posted by Lauren Beliveau

Lauren is an Editorial Associate 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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