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The art and science of designing a profitable SLA

The Service Level Agreement (SLA) is the beating heart of the client-service provider relationship. It codifies the many expectations of the client in black-and-white, instructs the facility management partner about their responsibilities, and governs how the two parties interact with each other.

Designing SLAs is both a science and an art. On the client’s part, they must make a comprehensive list of the type, extent and standards of the services they expect, which, after consultation with the vendor-partner, must be broken down into recordable, measurable tasks. While on the service provider’s side, experts must assess this list of expectations, hold a free and frank discussion with client representatives and then devise SOPs as well as settle on the resources necessary to execute every clause of the contract.

If drafted perfectly, an SLA becomes the bedrock for a mutually beneficial relationship that can withstand storms of every kind. But if what was discussed is not put down on paper, or a requirement was not discussed at all, either the client becomes dissatisfied with ‘incomplete’ services or the service provider runs into losses.

How should service providers deconstruct a client’s requirements into tasks? And most importantly, how should all this contribute to a budgeting process that makes the client happy and the service provider record a profit?

We spoke to industry insiders to understand the process of designing a foolproof, financially viable SLA.

1) SLAs: Are all services linked to the agreement?

2) FM budgets must match service expectations

3) Define scope of work in FM contracts

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