How to Manage SLA Breach in the Energy Equipment Industry?

Services can always get out of hand after a sale is made. Imagine the level of services you would get after you purchase equipment and there is no documentation of what happens next. There is no liability if we do not have documentation. Here comes the need for Service Level Agreement (SLA). SLAs are a document between the customer and the service provider. It includes details of service, the standards that the service provider must stick to and the metrics to measure their performance. The main objective of service level agreement is to ensure clarity and accountability from the service provider. SLA’s are essential to ensure smooth operations, timely support and reducing downtime. However, there can be repercussions when there is an SLA breach. 

Components of a Well Structured SLA

When we talk of creating a service level agreement, we set our eyes upon detail. We see that everything that is written is well structured. Also, we take care of the hindsight i.e. the repercussions in case of SLA breach. Let us look at them.

Service Description

This includes the services provided and promised by the service provider. This is one of the major after sales strategies that they follow.

Performance Metrics

These are some of the measuring parameters that the service providers follow. They are specific and measurable like the uptime, response time and resolve rates. These are a great way to evaluate any employee’s performance as well.

Penalties and Compensation

This clearly defines the penalties that a service provider is liable to give in case they fail to meet the SLAs. This can also include compensation and the corrective actions.

Exclusions and Limitations

There is room for some relaxation in every documentation. Same is the case with SLAs. These may include the specific conditions and circumstances where the SLA does not apply.

Dispute Resolution

In case of any SLA breach, this documents the mechanisms for addressing and resolving the conflicts. 

Termination Condition

This can be said to be a last resort or something that happens only in extreme circumstances. These are the terms under which the SLA can be terminated either by the service provider or the customer.

Types of SLAs in Service Management System

After looking at what all is listed in a SLA document, let us see the options for structuring it. Ideally, there are three types of options for structuring SLA. They are:  

Service Based SLA

These kinds of SLAs in service level management highlight one kind of service for all the customers using it. We can say it is a service specific SLA. The main advantage of service based SLA is that it is easy to manage and communicate.

Customer Based SLA

The customer based SLAs are customer specific and vary from customer to customer irrespective of the services. It is customized as per customer’s needs. The customizable nature of this SLA makes it favorable for the customers enhancing their satisfaction levels.

Multi Level SLA

These SLAs combine both the kinds of SLAs i.e. customer based and service based. They operate in three levels which are corporate level, customer level and service level. The organizations benefit from this as they are more flexible and tailored to their needs.

What is an SLA breach?

In any service industry, SLA breached means when a service provider fails to meet the agreed-upon services outlined in SLA. The SLA violation can include delays in response times, unmet deliverables or low performances. This eventually results in mismanagement, technical failures and resource crunch. Addressing SLA breaches promptly is very critical from a business point of view. Implementing strong monitoring systems which provide real-time data can be of great help. We can say that SLA management can make or break a business.

SLA is not just a contract. It is a commitment for excellence to foster reliability of the customers.

How SLA Breaches Occur in the Energy Equipment Industry?

After discussing the minute details about the SLAs and understanding what an SLA breach is, let us get specific to the energy equipment industry. Energy equipment industry is huge and can majorly affect the global economy. However, with more power comes more responsibilities. The responsibility for getting the business operations run smoothly with minimum or no downtime. Let us look into how SLA breaches occur in an energy equipment industry.

Equipment Failures due to breach in SLA

The most common way in which SLA breach happens in the energy equipment industry is through equipment failures. This results in major downtimes. According to the International Energy Agency (IEA), unplanned downtime can result in up to 38$ million per day loss to the company. This happens due to the wear and tear and improper maintenance of the equipment. This downtime breaches SLA and affects the performance metrics drastically.

Supply Chain Issues

Disruptions in the supply chain can heavily impact the SLA. Delays in getting the appropriate spare parts is majorly due to the logistic challenges. This delays the service dramatically which causes SLA breach.

Labor Shortage

The maintenance task of such a large equipment like the ones used in the energy equipment industry requires skilled laborers. Lack of laborers causes decreased service quality and extended repair times. Needless to say it breaches the SLA eventually.

Technological Failures

Things like software bugs, cybersecurity issues and failure in monitoring systems makes it difficult to adhere to the SLAs. The compromised data integrity results in SLA breaches.

Compliance Issues due to SLA breach

There are different compliance standards being issued. Changes in safety standards and compliances related to industry or environment can result in delays in maintenance tasks. This might result in breaching SLAs.

How can AntMyERP’s Service Level Agreement Software help?

After having discussed all the problems associated with SLAs, let us discuss the resolution. In this technological world, there is no better way then to take the help of the best SLA software available. AntMyERP’s service level management tools help in multiple ways. You can clearly define the SLAs and associate it with the desired contracts. We have an SLA tracking tool as well which means you can track the SLA with our SLA monitoring software. All the products associated with different locations, equipment and devices can be viewed. In case of any issues, the user can take the help of the SLA ticketing system and generate service calls for the technicians to work on.

AntMyERP is your one stop solution for mitigating the SLA breaches.

Final Thoughts

With this elaborate discussion, we have seen how SLA breaches can impact your business hugely. However, employing the right strategies can help mitigate it to a large extent. The energy equipment industry can take the help of SLA software to plan out preventive maintenance before a major breakdown happens. Enhancing cybersecurity with the help of the software may go a long way. In similar ways, advancing the technology and hiring more skilled laborers can help curb the issues related to SLA breach. 

We, at AntMyERP can help you with all your SLA needs. You can get in touch with us and share the challenges you are facing related to SLAs and we would be happy to help. We serve only the best!

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