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Why a Service Level Agreement is Important

A good SLA is important because it sets boundaries and expectations for the following aspects of data center service provisioning.

  • Customer commitments. Clearly defined promises reduce the chances of disappointing a customer. These promises also help to stay focused on customer requirements and assure that the internal processes follow the right direction.

  • Key performance indicators for the customer service. By having these indicators established, it is easy to understand how they can be integrated in a quality improvement process (like Six Sigma). By doing so, improved customer satisfaction stays a clear objective.

  • Key performance indicators for the internal organizations. An SLA drives internal processes by setting a clear, measurable standard of performance. Consequently, internal objectives become clearer and easier to measure.

  • The price of non-conformance. If the SLA has penalties (something that many IDC providers prefer to avoid but should not) non-performance can be costly. However, by having penalties defined, the customer understands that the IDC provider truly believes in its ability to achieve the set performance levels. It makes the relationship clear and positive.

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