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Published: Dec 09 2019

Best Practices for Managing your Service Level Agreements

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What's in this episode?

The Facilities Management Coffee Talk team deep dives into best practices for setting and tracking service level agreements (SLAs) with your service provider network. If you are interested in more information about this topic check out our eBook, 8 Ways to Better Manage Your Service Providers.

Full transcript:

Trey: All right. Welcome back everyone to the continuation of the second in our series of our Facilities Management Coffee Talks. Our listeners are constantly requesting to hear from industry experts on very specific industry trends and best practices. Today, our focus is on SLAs, Service Level Agreements, and how to ensure contractors are meeting those Service Level Agreements. We've asked back Jim Peterson, one of the original founders of the Accruent Verisae CMMS Software Platform, and an 18-year veteran in the facilities management space. Thanks for joining us again, Jim.
Jim: Trey, my pleasure. Always enjoy these.
Trey: All right. Maybe today you might be enjoying a different brand of coffee, but I hope you have some coffee for the conversation.
Jim: I believe it's the little Keurig pack said Kona coffee on it today.
Trey: All right, that's fantastic. So Jim, our listeners are really interested in SLAs. And this was an inquiry that came in, but Service Level Agreements can mean many things to many people. Again, knowing that our listeners could be in the big box retail space, grocers, convenience store operators, how would you define Service Level Agreements in the world of a facilities management software or computerized maintenance management software package?
Jim: Yeah. It's actually a interesting question. So historically, SLAs, were very specific and they were either a show up time or a fix time. And, when contracts were held in file cabinets, it was a number on a piece of paper. And honestly, I think people struggled to manage those SLAs. And in today's world ,where I think people are all connected to the same CMMS, people meaning the Central Maintenance Group, as well as perhaps the facility and the contractor all on the same system. In my opinion, SLAs... Well, I have one or two opinions, Trey. Either it's not all about SLAs or SLAs encapsulate more. And, what I mean by that is there's so much more than just when you show up to having a good relationship with your vendor and your service provider. And, with providing a good service to your facilities.
Trey: So that makes sense. I think probably most of our listeners as operators think service level as far as delivering the service. But what I heard you say is, you also look at service levels as far as response time and accepting a work order. How do you do that? I mean, if we have something urgent, and we need to know asap within 30 minutes, within an hour, how do we know that a contractor can do that work?
Jim: Okay, so yeah., So in the system we do have as far as a third SLA, which as you say, it's not an accept time. And, I've seen some very aggressive ones for more urgent types of equipment. Refrigeration is one, for example, where response is urgent. And the way the system does it is, from a time of work orders dispatched, a vendor gets to choose how they're contacted. That can be a phone call, that can be an email, SMS. But from the time it's dispatched, they need to acknowledge they're going to do the work in their accept SLA. And if they don't, we've got a couple of different routing mechanisms that we can do. We can alert somebody at the retailer, at the headquarters location. We can actually just go to the secondary provider. And of course the system is noting that they missed their accept SLA.
Jim: But absolutely, vendors are required to acknowledge and accept the work. And I think they always have been. I think it's just been a struggle to keep track of all the various emails and phone calls, and much easier to track when you've got a computerized maintenance management system to do it for you.
Trey: So that's helpful, because the concepts I think we're diving into, go as far as even how do we establish those. So, if I think that somebody needs to respond within 30 minutes, do you know best practices based on your clients? I mean, how would you advise some of our listeners to make some of those decisions and put some of these best practices in place?
Jim: You know, honestly I think as a conversation, both with us and the customer, but also with the service provider. It's a conversation, and it is what it is. And especially, again, when we're talking about perishables, it's just math. If a case is down, you've got to show up by this time, so therefore you've got to accept by this time. And some of it I think, again, is, already happening. It's just not being tracked and reported, and KPIs aren't set up around them. Hadn't been, rather they are now, they're starting to be, I think, our best practice customers. So, but back to your question, we certainly have averages for all of those values across our customer base. And so, especially our Deployment teams have a point of view on what those values might be, as far as except accept, show up, and fix times.
Trey: So then that's good. And that answers a question that I had. Moving on to I think one of the original requests here tied to what SLAs could be represented in the system. Some of our clients are struggling with contractors billing for time, not on site. They're rounding invoices, rounding up. We hear that all the time. And in some cases, they accept and then don't show up at all. How do you manage that?
Jim: So that's a good question, Trey, as far as how do I prove that somebody's there, but before I answer it, I wanted to also just... You've reminded me of something. And in the beginning I said historically SLAs are about showing up and fixing things. And really, where best practices has gotten to and with our customers and our vendors is, setting up four, five, six, even 10 KPIs, and managing the relationship around those KPIs. And what I mean by that is that can be how many times do I fix thing in the same day? How many times do I fix it on the first trip? How many times... What's my trend as far as costs? Is it trending up? Is it trending down? Those types of things is what I'm seeing, as far as people really having good relationships and structures and conversations with their vendors.
Jim: But back to your question about how do I know when somebody is there, we use a technology called geofencing. And what geofencing is, is so every facility has a lat/long location. We then setup 100 yards, 200 yards, something like that. It's a circle around that using geofencing and GPS. And then, when technicians arrive onsite and start work or check in with stores or whatever the case may be, we know exactly where they are, using the location services on their phone. And we can prove pretty much exactly when they were there, when they left, and so forth.
Trey: So, that's interesting, Jim. Do you guys charge for that? Because if I'm a contractor, I'm not sure I want to pay somebody to monitor me while I'm in the field.
Jim: So, we certainly don't charge for that. We don't charge the vendors anything, actually, to use our system, and never have. So no, it is a, it's a change. Certainly it was years ago when we introduced the concept because what results from geofencing and automatically taking time onsite is it does change the dynamic with how vendors are charging for the work they do, based on the time they're actually there versus rounding and so on. A little bit of a different conversation perhaps, but it's all kind of wrapped up into that, am I working with vendors that want to partner with me to deliver the best maintenance that I can to my facilities?
Trey: Yes. So almost like a level of accountability, but also a level of commitment to making sure the partnership is successful. We do see some interesting use cases though. As operators, we see that sometimes there can be multiple contractors onsite. How do you manage some of those different, unique use cases, we'll call them?
Jim: Sorry, Trey, I actually don't understand the question.
Trey: Oh, I'm sorry. From a geofencing perspective, that seems easy to manage if one contractor is onsite. Do we... Do you ever run into unique use cases where maybe there's multiple contractors onsite? Would it be handled the same way or-
Jim: Got it.
Trey: ... or a different way of approaching them?
Jim: 100%. It's handled the same way. So each a technician.. So the site has its X, Y location and we set it up accordingly. And then each work order or each technician on a work order is actually tracked whenever they're clocking an action is when... So we don't have a, I'm monitoring you every place. It's when you interact with our system, we will take a snapshot of what your geolocation is. So again, it's typically showing up, checking in, starting a job, adding a part, checking out, closing a work order. All of those different times. For each work order, we're clocking the X, Y coordinate or the geofence location.
Trey: All right. So that could work for multiple individuals. That's helpful. The other thing I see is obviously is facilities managers, we want to make sure the customer experience is good. So we wanna make sure the store managers and others are really happy with the work that's being done. And that kind of goes a step further past a Service Level Agreement. Do you guys do anything to just get feedback from our clients, the store managers, or the people in store?
Jim: Absolutely. So we've got a couple of different ways, three or four that come to mind. One is, for each work order, a store is asked to comment and to give a rating on kind of their level of satisfaction. And so that, now again, that's one. Another one is where the system will let's call it alert people when there's account, like a planned preventative maintenance coming up, if there's an emergency service coming up. The system's proactively letting them know what's happening. And that's always increased the level of satisfaction.
Jim: Another thing that we have is capability for stores to interact. It's kind of like almost a mini site survey. So they've got a capability to talk about preparedness, for example. You can, as a central maintenance operation, you can send out a survey to have them walk the floor, answer a few questions, do a general level of satisfaction. So there's a couple of different tools to allow stores to provide feedback into the system.
Trey: Well that sounds great, because obviously we need our internal customers to be very happy. Last question for you, Jim. Let's take the worst case scenario. We have a contractor that's constantly missing SLAs. Any guidance for our listeners on the best way to handle that situation?
Jim: So, I think each situation is always unique, Trey. But from my point of view, I'm a little bit old school. And when we have an agreement, I'm not asking you to be perfect, but I am asking you to understand that we have an agreement. And what I mean by that is, where I've seen some more bigger customers that have large vendor networks that end up, and also frankly their locations are in places where there's enough to go around, if that makes sense. What they do is they... It's kind of a three strikes, "Hey, we've met that first quarter. I said you needed to meet your SLAs 87% of the time and you missed it. So you're on a warning." Second time that happens, it's kind of your last warning. Third time it happens, I'm really sorry, but we just can't do business together because again, to the point you made just a few minutes ago, most important thing for us is to probably stay on budget and make sure our internal customers are happy.
Trey: Well that's perfect Jim. Thank you. Do you... So you said you kind of support a grace period or a warning, but after that one warning, you pretty much play hardball, is that correct?
Jim: Yeah, I do. I mean, again, I've seen people do one warning and you're out. I've seen other folks do two. And because it's basically, "Hey, here's our goal, here's our agreement. You miss it. You're on a, let's call it a PIP. You're on a Performance Improvement Plan, and then if you miss it again, that's your last warning, next time you miss it you're done. I've seen people do both.
Trey: That is perfect. And Jim, that's all I can ask. Thank you for making time to speak and share again with our listeners.
Jim: Absolutely, Trey. I enjoy it.
Trey: And to all those listening, we will continue the second in our series of Facilities Management Coffee Talks. Please continue to listen in.

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