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SLAs – Creating Collaborative Negotiations

Service Level Agreements (SLAs) form an important part of any service contract, as it provides the basis for managing the relationship between the service provider and the customer, for the level of service to be delivered.

The SLAs has some pre-requisites that form the backbone of every contract. The level of service, kind of service as well as the frequency of the service provided is clearly defined in the SLA. The availability of facility to be serviced, resources required and the performance of the service provider are also mentioned. The serviceability deals with the deployment of additional resources for specific cleaning requirements. The serviceability could also mean reduction of resources or improvement of efficiency by means of deploying additional resource of one type and to reduce another resource.

SLAs also deal with the priorities of the customer in relation to schedules and efficient services. It also defines the responsibilities of both the service provider and the customer. Also referred to as the ‘Bible’ of billing, SLAs put forth explicitly the parameters on which the service provided will be paid. In India, a service contract is drawn on a stamp paper and is generally required to be fair to both parties with the inclusion of an exit clause that allows the service provider as well as the customer to terminate the contract with a period of notice. The contract has to be clear in the event of any breach and should lay down the solutions to be put in place to remedy the breach.

Several meetings and discussion go in outlining the needs of both the parties. The contract should include details on notices, arbitration and jurisdiction, that may be needed in case of any serious issue. It cannot just rely on the communication shared between the service provider and the customer. These are necessary to safeguard the rights of both parties along with their responsibilities and efforts made to ensure that they are fair to both.

SLAs have to be crisp, clear, and measurable on the service provided so that the customer and the service provider can easily check and ensure that all the agreed parameters in cleaning are being followed without any deficiency. This kind of professionalism is slowly becoming apparent as the cleaning industry evolves to keep pace with the changing dynamics of the industry. The norms, limits, means of measurement, frequency of monitoring are just a few examples of the clarity needed between the customer and the service provider.

There have to be clauses in the contract that will deal with any situation taking place in the course of the service being provided. For example, the SLA has to take into account the time required by a worker to transport and set up an equipment from one place to another and should not be based on the highest expectations. It should be clear on the equipment maintenance, breakdowns and the effects thereof on the operations. These clauses will define the limits within which a service provider can achieve and base the assessment from the customer on the same with these set parameters. There is also a need to be exact while detailing the SLA, in terms of the person-in-charge of audits/checks, the frequency and also the reporting structure in case of any non-conformities recorded by the in-charge. It helps the service provider and the customer as it simplifies the management, monitoring and supervision of the work.

The frequency of cleaning activities has to be clearly defined to reduce unnecessary burden on the resources and also to improve performance. The schedule for every concerned person will give information on making the optimum use of the available resources for maximum efficiency. The schedules have to take into account the time of travel, the maintenance of the machine, and the operational needs of the machines. This will help in monitoring the work undertaken and also showcase the flexibility and system oriented work culture of the service provider and help deal with absenteeism. The schedule will have all the details required for an efficient work profile.

SLAs should have details of operational maintenance including the format for service schedule and details of periodicity of report submission and the concerned person to receive the report and act on accordingly. All these have to be a part of annexure that will be referred to in the service contract.

SLAs should be tuned to the readiness in accepting improvements in specific areas and the need for implementing the same. The timely updates have to take into account the technical aspects for modifying the resource requirements and changes in schedule for accommodating specific programmes. Contract enforcement is also an important part of the contract that makes provisions for penalty and rewards on the basis of the service provided. Penalty can be monetary or otherwise and is often used as a measurement matrix that aids in monitoring and evaluating the performance of the service provider. This should be undertaken periodically as mentioned in the contract.

SLAs are to be measured by its linkage to business values. For example, suggestion boxes in hotels contain customer feedback that is analysed and sent directly to the top management and is not disclosed to the service provider or to the person engaged with them. The evaluations are then measured according to the linkage of its business value. In this example, the business value for a hotel is its guest satisfaction and linkage is from the service providers’ performance to the hotel’s (customer’s) business. A clear demarcation on the purview of the service provider and the customer, inclusion of changes suggested by both and the responsibilities of the same should be included.

The contract is an absolute statement of quality levels with legal or financial penalties that come into effect if the levels of services are not met. The contract has to have a reference of statutory as it is a legal document whereas the SLA is a work in progress that is defined as a balanced business requirement with available service resources.

SLAs have to be drawn by keeping the following points in mind, the need to approach the process positively and as a quality issue, drawing up the document in lucid language that is understandable to all and using reports and review meetings to discuss resource issues, and problems openly. SLAs enrich the industry as it brings professionalism to it and also allows for growth of all players in the most efficient manner in a healthy environment.

Based on the Presentation by Vinay Deshmukh, CEO, Forbes Facility Services Pvt. Ltd, on Service Level Agreements at the seminar organised as part of the 9th edition of the Clean India Show.

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