Managed Service Provider SLA

What is a managed service provider SLA?

In essence, a managed service provider SLA is an agreement between a client organization and a managed service provider that specifies the responsibilities of the client and their MSP. It spells out both the client services required and the MSP’s expected level of performance. A gapless SLA is essential to ensure that the client gets the required services seamlessly and satisfactorily. It must outline everything from mutual expectations, to indemnification.

The MSP starts drafting the SLA after the client company defines its needs and required service expectations. The service expectations are the foundation of the SLA agreement. A great MSP will help you define your service expectations well and ensure that the SLA aligns with them. Finally, you’ll define the components of your Managed Service Provider SLA.

Depending on the solution and provider, managed service provider SLAs vary in terms of procedures and various other components. However, there are some standard elements that you should look for in an SLA template. Including these components in your MSP SLA template will ensure that it is comprehensive and ensure that the MSP provides the level of service your business requires.

Elements of an MSP SLA template

Here are a few things that you should look for in your MSP SLA Template:

1. Agreement and Service Description

A good MSP SLA template first provides a thorough and complete overview of the services that the client expects from the Managed Services Provider. This section is known as the agreement & service description. It outlines all the terms and conditions that are agreed upon by both the client organization and MSP.

Then, both the client and the MSP develop a list of all acronyms pertaining to a particular client situation. Furthermore, the SLA precisely and extensively defines the deliverables i.e. what’s included in the services the client is purchasing from the MSP. The service deliverables are clearly spelled out with quantitative metrics for performance. Additionally, the SLA also clearly specifies the responsibilities of the client organization and MSP.

2. Availability

It's almost mandatory that an MSP SLA template contains an availability section. In this section, outages or service-affecting incidents are given a proper definition along with the reporting and resolution process. Your MSP should establish their availability aka uptime in this section. Typically, services like network monitoring services use percentage goals such as 99.99% network uptime for a year. In addition, the MSP might also schedule maintenance and other known factors into consideration while defining availability. Lastly, your MSP should have a monitoring system in place to measure availability by tracking uptime and other availability metrics included in your SLA.

Leaving anything to interpretation and miscommunication will inevitably lead to hidden fees or unresolved issues. Make sure you get the answers to the following questions about availability in your SLA:

What are the MSP’s uptime hours?

  • How can you reach your MSP during downtime?
  • Will downtime calls result in extra charges?
  • Should you be aware of specific times services will not be available?

⁠3. Performance

This section of your managed service provider SLA you are expecting from your provider. More importantly, this part also defines the metrics that will be used to measure the performance of the MSP. You and the MSP will sit together and work closely on deciding the metrics you will use. Once you have decided on the metrics, you can then establish reporting procedures and performance expectations.

4. Responsiveness

Responsiveness is a measure of how fast the MSP responds to the initial communication i.e. call/chat/email/ticket and provide the required support. It essentially measures how fast the MSP performs the services required to close the incident. Your expectations in terms of responsiveness must be explicitly mentioned in the SLA. Subsequently, your responsibilities as a client will also be mentioned for how to report issues, etc. in the agreement.

5. Problem management

The Managed Service Provider SLA must contain clear and extensive procedures for problem management from responsibility to resolve. This section in your MSP SLA outlines how you and your managed service provider will handle issues as they arise.

  • Responsibility

This sub-section under problem management must clearly spell out the problems you and your provider are each responsible for. For instance, reporting a system failure shouldn’t be one of your responsibilities if you hire an MSP to monitor your environment.

  • Escalation

Some IT problems are serious, some aren’t. But a business owner can often see an IT problem as the end of the world. Make sure that you make it clear to your MSP as to which problems are an emergency. This will ensure that those things take priority. Not that the problems that aren’t labeled by you as an emergency won’t be taken seriously. It will just help in prioritizing the order of operations when problems arise.

  • Problem reporting

A good SLA also establishes crystal-clear problem reporting procedures for both the client company and the MSP. This ensures accurate communication and thus prompt problem resolution. Make sure that the below-mentioned things are clarified in detail in the agreement:

Who does the client company contact?

How does the client initiate contact?

  • Portal/ticketing system
  • Email
  • Phone call
  • Chat
  • Problem Resolution

The MSP should have a general idea of how quickly they will resolve reported problems. However, the resolution also depends on other factors such as the availability and efficiency of problem reporting. For instance, how much longer will it take the MSP to fix the problem if something happens outside of the MSP’s “normal business hours”? Make sure you don’t leave details like these to interpretation.

6. Monitoring and reporting

Now that you have developed and ironed out most of the SLA, you need a way to measure how well the MSP is meeting your service expectations. You need a way to measure what is happening that may affect your SLA.

You can include the following items in this section:

  • Data to collect and how often
  • Types of reports generated
  • Types of reports the client can access

7. Scalability

As your business moves forward, your infrastructure needs to grow with it and professional needs change. Thus, you or your managed services provider may find it necessary to change or update your SLA at some point. To prevent frequent and unnecessary changes in your SLA in the future, it is better to introduce scalability in your MSP SLA template previously.

8. SLA violations

Consequences for not meeting service obligations are an integral part of a gapless MSP SLA template. A good managed service provider SLA explicitly outlines metrics and penalties for each service included in the SLA. These come in handy in cases of SLA violations. More particularly, your MSP will establish the conditions under which your organization will receive a credit against your monthly charges for an SLA “violation”. The most common form of remediation is monthly credit. Furthermore, there may be a refund in more rare cases. Your SLA must also include termination options to cover more serious SLA Violations.

In conclusion, the managed service provider SLA is one of the most essential items in the service provider-client relationship. It helps in defining and actively enforcing your service expectations. It also makes you aware of your responsibilities as a client and ensures that you hold your end of responsibilities.

Being the foundation of the service provider-client relationship, SLAs set expectations for both sides. If it is the first engagement between the client and the MSP, a gapless SLA can set the foundations for mutual success. It might be possible that only a certain amount of IT infrastructure or functions can be included in the agreement with the opportunity for growth at first. However, the MSP can further handle more of the client’s IT functions as the relationship progresses forward.

In many ways, SLA policies directly impact customer experience more than you think. As an MSP, you'd want nothing more than happy customers who're with you for the long run. (If you'd like to learn more about how customer experience helps MSPs stand out, Justin Esgar, CEO of Virtua Computers shares his two cents on the SuperPod — The no-filter MSP show!)

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