1. Home
  2. Blog
  3. Software Outsourcing
  4. Tips for Creating a Service Level Agreement (SLA) With an Outsourcing Company
Software Outsourcing

Tips for Creating a Service Level Agreement (SLA) With an Outsourcing Company

When working with an outsourcing company, having a service level agreement (SLA) is a necessary step. An SLA protects your company and the outsourcing service...

Damian Scalerandi

By Damian Scalerandi

SVP of Professional Services Damian Scalerandi leads every step of IT project delivery with multi-cutural teams to help accomplish client goals.

10 min read

Business man creating a Service Level Agreement SLA With an Outsourcing Company

When working with an outsourcing company, having a service level agreement (SLA) is a necessary step. An SLA protects your company and the outsourcing service provider by setting the terms and guidelines for both parties to work productively and meet expectations.

A well-written SLA helps everyone to understand their responsibilities and focus on primary objectives while analyzing metrics and tracking team progress. Heavy consideration is required before signing an SLA. Here are key points to consider if you plan to use a service level agreement.


Determine what services your IT company needs

Your outsourcing provider will need to know how to add value to your company. Therefore, recognizing where your IT department falls short is imperative when drafting an SLA. Knowing these shortcomings is also the key to expressing your motivations for working with an outsourcing firm.

IT managers must note the additional equipment and software that may be needed for efficient business operations in the office and the cloud. This is part of the uptime, which is often evaluated in percentiles or ratios.

You should further estimate the number of customers you plan to provide with your IT services and how your outsourcing partner can lessen the workload for your in-house team. After assessing these points, add the details to your SLA.


Plan for SLA exclusions

IT professionals always prepare for the unexpected. As businesses enter a service level agreement, they should decide on strategies that will be implemented in the face of emergencies and unforeseen circumstances, such as equipment malfunctions, upgrades, and system failures.

A comprehensive SLA prevents conflict during sudden interference because the agreement acknowledges that no one is to blame, and there is no breach of contract if a specific deadline passes before assigned tasks are complete. This section of the contract is an SLA exclusion and places the agreement on pause until unpredicted issues are settled.


Consider how and when to measure performance

Defining management techniques is critical. Set timelines for the duration of your outsourcing project to create deadlines for major tasks. Likewise, explain the levels of performance you expect from your outsourced team and explain to the outsourcing company how performance will be measured in your SLA.

Analyzing metrics and conducting performance reviews motivates every team member to work with accuracy and pay attention to detail while adhering to the schedule.

Productivity and timeliness are important, but the SLA provider should also be considerate to the outsourcer and find a middle ground. Ask the outsourcing firm their preferred methods of communication and record keeping. Similarly, discuss the reasonable time frames for notifications and responses.

Furthermore, how often will metrics and performance be assessed and what will be the basis of these assessments? All these factors will affect the points of agreement in the SLA, project management, and the final outcome of your IT project.


Draft and finalize the SLA

After considering your company needs and the variables that may affect your project, it’s time to start creating the official SLA contract. Begin with a draft instead of presenting a final version immediately.

If this is your first SLA, using simple language and formatting guidelines will lessen the stress and confusion throughout the finalizing process. You’ll also note areas of improvement before signing off on the agreement, and you should expect your draft to go through multiple rounds of revisions before both parties are satisfied.

Many outsourcing companies offer standard SLAs to IT businesses, but service level agreements with general terms often result in miscommunication. Every agreement should be specific and use concise language. Any ambiguous statements should undergo revisions.

Drafting this type of agreement may seem overwhelming the first time but following these tips will help to streamline the process.


Damian Scalerandi

By Damian Scalerandi

Damian Scalerandi is SVP of Professional Services at BairesDev. Damian leads every step of IT projects from design through project delivery. His 10+ years of experience in the tech field helps him lead globally diverse teams on large-scale tech projects.

Stay up to dateBusiness, technology, and innovation insights.Written by experts. Delivered weekly.

Related articles

Contact BairesDev
By continuing to use this site, you agree to our cookie policy.