Service Level Agreement Disadvantages

4. Formulating an SLA requires additional time and cost: “It takes inputs from legal and procurement resources to establish an effective set of documents/agreements,” said Scott Bailey, director, Strategic Alliances and Sourcing for Element Fleet Management. This type of agreement needs time to build and refine them, they are not suitable for transactional relationships (three commandments and one purchase). “Customers value shorter delivery times or faster service, which is why companies measure the cycle time of a process. They emphasize low prices so that companies optimize the productivity or cost of their inputs. You value quality products and services, which is why managers measure error or error rates. Finally, customers value reliable and consistent service, so companies need to measure and improve the reliability of their processes. But how safe should service and software providers, especially small startups, be? How is this measured and how can a counterparty ensure that its requirements are met? All the services that the client needs are included in the SLA. This means that the customer knows what awaits him in terms of quality of service and guarantees the customer a credit or refund if certain promised parameters have not been respected. SLAs also separate the roles of the supplier and the customer, with such an understanding that the customer knows who to turn to if they need help.

Assuming that a DSL provider that uses the phone line to connect to the Internet may not be responsible if the phone line does not work. Therefore, the customer should instead call the phone carrier to repair the phone line. The disadvantage occurs when the activity is threatened due to a lack of services or support from the provider. An example would be the customer talking to their customers online until they are suddenly separated due to system issues with the provider. While credits or refunds may be issued, customer integrity is also at stake, as maintaining customer loyalty is more important. “Leading financial institutions are in a culture of compliance with legislation and protecting their reputation and security in general,” says Gossels of SecurityExperts, whose company annually audits the level of risk of ASCOs for large financial firms. . . .