Travel managers are increasingly relying on service level agreements (SLAs) to monitor and manage relationships with travel management companies, technology providers and other providers. Second, as you noted, meeting many service standards will undoubtedly involve third parties over whom you have no real control. If your after-hours service doesn`t answer the phone on time, or if your GDS doesn`t include the lowest airfares, it`s unfair to penalize your agency. Travel agency SLAs sometimes add a method by which the agency measures and reports compliance with a service standard. For example, you can specify that your answering machine time is measured by monthly reports generated by your phone system. For agencies, creating SLAs comes with two major challenges. First, agency transaction fees are already often set at a low point to attract competitive business acquisitions, so there isn`t much room for penalties that would further reduce fees. Therefore, you need to set penalties at a livable level while impressing the company with the seriousness of your commitment to service standards. Q: Our agency was chosen to manage the business trips of a large company in our region. The Corporate Travel Manager has informed us that the company wants a written contract with a “Service Level Agreement” or SLA. What is an SLA? How do we design one? What happens if we don`t reach the required service levels? What happens if our failure is the result of a third party, e.B. of our emergency service outside of business hours? Travel agencies can probably offer service standards in many areas of work. Typical examples would be a maximum number of seconds before answering the phone, a maximum number of minutes before returning an email or phone call, a maximum number of days before a complaint is processed, and a monthly deadline for the submission of management information reports.
I`ve seen up to 20 of these standards in offers and contracts, depending on what the agency perceives as the client`s needs. In a white paper on next-generation service level management, Managed Objects, a technology provider for SLA management, noted that such agreements typically cover four service areas: service availability or system availability; Performance or response time to a request; support or time to resolve a problem; and security. With the introduction of this business management tool, which has been used by IT departments for more than a decade, travel management professionals are striving to make it relevant. By applying the SLA when traveling, companies define the performance and service level they expect from suppliers, with financial incentives and penalties built into the agreement. While tech SLAs can range from 20 to more than 100 pages, most travel-related SLAs are just a few pages with seven to 10 metrics, Kelleher said. Cross-border relations may require a language that uses the level of service by country. KEY performance indicators are usually provided monthly or quarterly, he added. The solution is to indicate in the SLA that you are not responsible for the actions of third parties that cause you to fail to meet a service standard. While the company may want to challenge your attribution of fault to a third party, it should be easy enough for you to prove that the error was not your fault.
With SLAs, companies typically define how they want to measure service levels for travelers. For example, a customer wants to define that 80% of calls are answered within 30 seconds and that 90% of travelers rate the agency three or better on a 5-point scale. You also need to detail the delivery, format, measures and payment terms, Kelleher said. A typical and simple example of an SLA can be found in GDS contracts, where you can find a section that guarantees that the system will be up and running 95% of the time, and then provides for a fee waiver every day the system is not operational. The 95% guarantee is the “service level”, and the fee waiver is the penalty for non-compliance. A: A service level agreement is part of a contract between a customer and a service provider. In an SLA, the supplier lists one or more standards by which they must work or incur a penalty. “A well-written service level agreement should save you from having questions or problems after a few years after a contract,” John Smith, president and CEO of Tower Travel Management, told members of the Midwest Business Travel Management Association at a forum last month in a Chicago suburb. BCD Travel said about half of its customers have implemented service level agreements in the last three to five years. However, most of the new offerings include the requirement for an SLA, noted Jim Kelleher, vice president of business development at BCD`s Chicago office. Why should you consider a service level agreement? They help set clear expectations for performance levels, provide potential ways to ensure and reward performance, and provide dashboards with metrics to monitor program performance.
A good SLA should not only establish penalties for non-compliance, but also include a financial reward for meeting or exceeding service standards. One of the benefits of SLAs, Smith noted, is that they provide a clear understanding of what both parties value. For example, if a customer expects their TMC to be measured by how they implement the company`s preferred vendor agreements, this will be included in the SLA. The objective of introducing a model service level agreement within government is to increase the accountability and responsiveness and functional effectiveness of departmental operations. In addition, it intends to define and deconstruct the role and accountability of the various stakeholders throughout the service delivery process. SLAs have become very popular in recent years, and they may be the new buzzword in American companies after the “quality assurance” that everyone gets tired of at some point. Thus, business-oriented agencies can expect clients to request SLAs more and more frequently. “People who find ways to measure performance and improve performance are usually up to date,” Kelleher added. But even IT-centric SLAs are evolving to rely less on pure IT issues such as availability and outages and more business relevance like transaction volume, productivity, and KPIs, which now account for about 40% of SLA content.
Online booking request in the Garden of the Five Senses Usually an addition to a contract, the SLA would detail the performance measures a company expects from the TMC, as well as financial incentives to exceed expectations and penalties in case of failure. Smith`s advice for SLA development includes aligning the value of the SLA with business objectives, weighting each metric, and ensuring it can be tracked and audited. Like Kelleher, Smith suggested only 7 to 10 measures to manage this process as effectively as possible. Within IT, a new type of technology such as managed objects has emerged, helping companies automatically and more accurately monitor the performance of contract elements. Three-quarters of companies surveyed on SLAs for IT consulting firm Hurwitz & Associates` best practices research report ranked the tool as a priority, but only 27 percent of respondents felt the data they use for SLA management was very accurate. Mark Pestronk is a Washington-based lawyer specializing in travel law. To submit a question for legal Briefs, email Pestronk at [email protected]. . . .