Top 5 reasons why you should stop asking for an SLA from your service provider
It’s a standard part of contract negotiations when dealing with service providers to include a Service Level Agreement (SLA). I’ve read a lot of them and they all have one thing in common: they are either completely useless or they dominate the relationship between you and your service provider.
In many cases, the service provider will offer the SLA as part of their Master Subscription Agreement (MSA) or their Terms of Service (ToS). That doesn’t mean that you can’t get rid of the SLA. Let me entertain you with 5 reasons why you should demand that they are taken out immediately!
1. It will never give you what you want
The main goal of an SLA is to clarify what you may expect from the service provider. It will include a description of the service (incl. the features), the level of support that will be provided (incl. the criteria used to triage support requests) and, more importantly, what you can expect when things go south. Not surprisingly, it’s the latter that will stir up discussions during the negotiation as this is the part that really matters.
I just wanted their service to be up and running as quickly as possible!
The SLA will probably grant you with a credit of some sort, being either free support/consultancy minutes or an actual refund to compensate you for loss of service. Up until now, I’ve never experienced a situation in which this was what I actually wanted from my service provider in the aftermath of an outage. Usually I would end up stating that I was not looking for a credit, I just wanted their service to be up and running as quickly as possible!
The credit or refund is supposed to be an incentive for the service provider to make sure that they offer premium service to avoid compensation. However, the SLA will also include a long list of exceptions in which case there will be no compensation. That list will be the longest part of the document.
So instead of focussing on the penalty (which will neither get you want you want, nor will it be likely that it is granted due to all those pesky exceptions) you should be discussing how an outage of service affects your partnership. Because if your service provider suffers from an outage, you will suffer from that outage. As such, it’s more important to discuss emergency communication strategies and what you can do to help to restore the service.
2. It’s a dead letter anyway
There have been plenty of times were the SLA is no more than a dead letter because the terms are meaningless and non-negotiable. For instance, companies like Amazon or Google will not negotiate with small or medium sized business about their SLA. Which is fine, because it doesn’t mean anything. It’s merely a letter of intent on the service that you may expect. As a grand gesture, they might even give you 15 minutes of free support credits in case of major outages.
They probably won’t even call you
For most small to medium sized companies there is one dead certainty when dealing with global service providers: if things go awry, you won’t be the first customer they’ll call to apologise. They probably won’t even call you at all. So why even bother reading the SLA if it doesn’t concern you? And if it’s a dead letter, you can leave it out of the agreement.
3. It will become very expensive if it will actually hurt
Don’t get me wrong, meaningful Service Level Agreements do exist. But they’ll cost you top dollar. If you want your service provider to commit to resolution times, 24x7 support and create patches outside of office hours, you’ll see an increase in both the SLA paper volume (caused by all the extra terms and exceptions) as well as the monthly service fee.
There will be an issue with their product and they will experience an outage during your contract period
There is a good reason for this: it is an illusion to think that your service provider won’t make any mistakes. There will be an issue with their product and they will experience an outage during your contract period. So if you demand them to be flawless, or at least fix it immediately, be prepared to pay for it.
Alternatively, you could also accept their flaws and work together with your service provider to improve their track record. If it’s a long term commitment, you could negotiate a reasonable termination clause, in which you are allowed to end the partnership if they don’t learn from their mistakes. You don’t need an SLA for this and in most cases, the service provider will agree with those terms as they will take pride in offering you the best experience of their product.
4. It’s a commitment between strangers
If the provided service is crucial to your operation, so is your relationship with your service provider. However, at the time of contract negotiations, you are probably complete strangers.
This is mainly why Service Level Agreements tend to become lengthy documents with all sorts of terms and conditions that are discussed from a position of unfamiliarity or even distrust.
If you distrust the person across the table it will take longer to reach an agreement
In my experience, the SLA negotiations (and contract negotiations in general) will go much smoother if there is a personal connection between the negotiators. If you distrust the person across the table, or are annoyed by their tactics or (lack of) charming personality, it will take longer to reach an agreement as you will be super detailled about each specific term.
This has nothing to do with the actual terms and conditions in the SLA nor with the service they will provider, but it does say a lot about the type of partnership that you will have.
So if you find yourself in this position during contract negotiations, you may need to take a step back and wonder if you’re on the right track. Take some time to see if there are other service providers which are more compatible with your company culture.
5. It’s not the type of relationship that you should want
Last but not least, there is one more side-effect of the SLA that makes you want to toss it out: if you’re planning on a long-term commitment with your service provider, you might want to go for a partnership agreement instead of a service agreement.
Managing expectations requires a continuous effort from both sides
As explained in reason #4, an SLA is created from a position of mutual distrust. Some will argue that it’s better to manage expectations. However, it’s my experience that for some reason the issues that will actually cause friction between you and your service provider are never part of your SLA. Managing expectations requires a continuous effort from both sides. It’s not something that can be settled by a piece of paper with a signature on it.
Start your relationship with your service provider on a positive note by shredding the SLA and instead plan regular meetings with account managers, product owners and client success managers. Spent your time on growing your partnership instead of negotiating terms and conditions.
For a long an sustainable partnership it is required that you are both willing to invest, either in terms of accepting the possibility of flaws and outages as well as understanding which part of the service that you provide is most important to your customer.
Share you thoughts!
I’m curious to hear other experiences with SLA’s and contract negotiations, so please share your thoughts in the comments!
