Is this the end of the SLA? MSPs need to offer customers an XLA
By Jason Murphy
The service-level agreement (SLA) is a key component to any master service agreement (MSA) for any MSP looking to set clear guidelines with their customers on the services offering. Most of the MSAs I have reviewed outline exactly what the MSP is contractually obligated to provide the customer or business. The SLA is part of the contract where both the provider (you) and customer (them) agree on the IT services delivery model.
SLA vs SLO vs SLI
Some MSPs will not offer a guarantee on the SLA and instead offer a set of service level objectives (SLOs), which are basic objectives defined in the SLA the MSP must adhere to. Within that, the service level indicators (SLIs) are the keys to measuring compliance within the SLO.
Examples of SLIs include offering 99.999% uptime or 99.96% uptime on all of your hosted servers. These key metrics represent the raw objectives you strive to adhere to, and are often solely focused on availability and uptime, enabling you to measure compliance and avoid disputes.
| SLA = The formal service agreement you make with customers, which is normally encompassed in the master services agreement as a schedule item |
| SLO = Describes the objectives your MSP must make to meet that service level agreement |
| SLIs = The actual numbers you provide on your performance, and that you need to hit in your service level objectives |
While I may have suggested this is the end of the SLA, the reality is far from it. The SLA is as important today as it was when introduced over 20 years ago. It’s the foundation to how your sales team gets to discuss what your MSP business will ultimately provide the customer. It is also the mutual agreement of services offered between the MSP to the customer.
When I was an account executive for a CRN Top 20 MSP, selling managed services to businesses across US/Canada, I used much of the technical and legal jargon contained within the SLA to demonstrate to the customer that my MSP was different from the other guys competing for their IT dollars—that our MSP business was mature, defined, and detailed to their business outcomes.
I do offer a word of caution: do not include too much within your SLIs. These should be similar to key performance indicators (KPIs), but not every metric needs to be captured and delivered within your SLA. Understand the ones you know you can meet and develop your SLA maturity as your MSP grows and evolves its services delivery.
Offering your customer an XLA
An XLA is a user experience level agreement. Even with an SLA in place, an MSP may be hitting all of the right SLIs, but still leave the end users with a poor perception of how and what they are doing. I used to do public speaking events to CIOs/CISOs in boardroom events across the United States and addressed the “Amazon Effect”, where end users want to consume IT Services quickly and effortlessly. This paradigm shift has outpaced some MSPs. Even with the advent of amazing IT service management platforms, most of the MSP Channel isn’t familiar with things like self-service or service catalogs and are still using old operational processes in professional services automation (PSA) tools. As a result, we all need to be aware of the “Watermelon Effect”.
The Watermelon Effect is a biproduct of thinking your IT metrics are saying you’re doing everything required, but still leave the customer and its employees with a poor experience.
In some of my N‑central® boot camps, I tell people about using a feature called Netpath™ to help manage your customers’ experience. Not only does it help you visualize, and alert when your end users are having availability problems, it can also notify you of latency, which can impact performance for your customer and its employees. From source to destination, Netpath can help you truly get a feel for what the customer may be experiencing. It can help you see and be aware of bottlenecks as they occur. This feature in N‑central is under-utilized, but can really improve your performance when it comes to monitoring cloud applications like Microsoft 365, Azure, and other lines of business applications that your customers are using.
If you’re going to include an XLA, it’s a great place to start showing off how awesome your MSP business is by asserting your support metrics. We all know that when your customers click or fill in your ticket surveys, you are probably getting anywhere from 95-98% CSAT rates in your 1-to-5-star ratings. Include this as part of your XLA. Also, include your net promoter score (NPS). I would recommend including other items, such as first call resolution, average ticket age in days, and AHT. Many MSPs are already tracking these metrics, so now would be a great time to build them into your master services agreement as part of an XLA. I know it may seem a little fluffy to include these things, but the more you are customer- and employee-centric, the more you will speak to their business outcomes, win their trust, and ultimately keep their business.
Jason Murphy is the N‑central Automation Nerd at N‑able. You can follow him on reddit on r/nable or Twitter at @ncentral_nerd.
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