On paper, an SLA is the best approach for all stakeholders in the FM chain. But as budgets tighten, costs rise and clients struggle to grasp the full picture of this concept, that is where the SLA remains…on paper. Why do clients still hanker after manpower? As resource costs rise, are they sympathetic to their service partner’s plight? Do they understand that unless a service, and its associated tasks, are listed in an SLA, they will not be delivered?
On the service provider’s side, does everyone follow the service – task – frequency – resources – cost logic to arrive at a quote? Or is there simply no science to SLA-based budgeting? Mrigank Warrier, Assistant Editor, Clean India Journal, lifts the veil off SLA contracts to see the reality of their execution and profitability today.
Give me ‘x’ people on ‘y’ days for ‘z’ hours, and I will look after the rest’ is an approach that is still being adopted largely for facility services. How does one design an SLA for a situation where the deliverables are resource-based (manpower) rather than service-linked?
One way possibly, is to quantify the experience and expertise of the personnel being deployed to the site. However, just as an intensive care specialist cannot keep a patient alive without the right drugs, a facility management team cannot deliver its best, or even the bare minimum, without the necessary equipment being made available to them at the right time. In this scenario, there is no avenue for a service provider to outperform their competitors or excel. Costs remain static and service levels vary wildly.
On the bright side, ever-more numbers of clients are trusting the expertise of service providers to use the best cost-efficient methods necessary to meet predefined goals set down in an SLA. While this is a growing trend, do clients really understand that an SLA is an all-encompassing document that dictates every facet of the client-vendor relationship?
On the client side, those who look after facility management comprise a mix of the young generation who respect the sanctity of SLAs, and veterans who come with a traditional mindset and struggle to orient themselves to a no-extras, no-oral-agreements kind of culture.
The latter are typically the decision-makers in an organisation, and they still ask, ‘what is the attendance?’ and ‘how many people have come’?
This has led to the evolution of a ‘hybrid’ SLA, where both service levels and manpower are monitored; a duplication of effort for the service provider. Under the SLA model, once service levels and financials are agreed upon, how the goal is achieved is the service provider’s lookout. By harping on manpower, the very objective of the SLA is defeated.
This mixed-up model became particularly problematic during the pandemic. While service levels intensified and the amount of resources required to achieve them increased, clients assumed that the absence of facility users during lockdowns translated to fewer FM personnel. Further, they wanted costs to drop in correlation with lower manpower deployment, not realising that the overall expenses of service providers have shot through the roof.
New disinfectants, new machines and a whole new emphasis on measuring hygiene have drained the coffers of service providers; under the SLA model, the financial onus is on them to procure these items. By choosing to focus only on manpower, clients have absolved themselves of the responsibility to help their service partners keep their heads above water.
An SLA is perceived as a win-win solution for both parties. Unless clients begin to understand how the current imbalance is pinching service partners and pushing them towards a financial brink, the entire SLA model, and its benefits to clients, is at risk of being abandoned.
Consider a scenario where a project is being bid for by two service providers; one who understands the resources required to meet the desired service levels, and one who doesn’t. The first one will meticulously map out the resources required, calculate their cost and then pitch a quote. The second’s priority is to win the bid; he will start with a quote that will make him the favoured choice!
Such bids moving forward fail to enforce every clause of the SLA, leading to penalties and of course, losses. Ironically, a cost-prioritising client also knows that the lowest bidder may be certain of nothing but his price.
A different kind of reality strikes when a tradition-minded client shifts from a non-SLA to an SLA system. That first morning, a team of FM professionals arrives and sets to work, checking off a list of pre-assigned tasks with speedy efficiency. The committed-to results achieved, they are all set to move – to another part of the facility perhaps – when the office boss asks one of them for a glass of water. His personal assistant asks another to run out and get a photocopy. And so on.
There are no miscellaneous tasks in an SLA. Each task is listed in black-and-white, and both resources and manpower are allocated accordingly. So when the FM team respectfully declines to lay the dining table or make someone a cup of tea, tempers fray, the company’s FM Head is summoned and expected to give a earful to the FM team that was simply doing its job. Office support is a separate FM function, which this office had taken for granted as part of the FM package.
A mass education program on SLAs for both service providers and clients would not go amiss. The SLA model, if strictly adhered to, is infallible, as long as both parties hold up their ends of the bargain.