SLAs are Dead

I have just returned from Sage North America’s Insights conference in Denver. The conference is, at the same time, completely exhausting and completely invigorating. I learn so much from Sage partners because they continue to test my thinking.

Without question, the best test of my thinking came during my pre-conference session on Sunday. One of the attendees (I cannot remember who, so if it is you, please claim the credit) shook me to the core. She said, “So if you believe we are professional knowledge firms, why should we be selling service level agreements?” I was dumbstruck.

My only response was, “You should not.” I have to admit, I have been wrong.

In one of the all-time great movies The Ten Commandments, Cedric Hardwicke as the Pharaoh Sethi says, “Let the name of Moses be stricken from every book and tablet. Stricken from every pylon and obelisk of Egypt. Let the name of Moses be unheard and unspoken, erased from the memory of man, for all time.”

The same must be done for service level agreements. So, let the phrase “service level agreement” be stricken from every Ron Baker book and article. Stricken from every blog post and comment on the VeraSage Website. Let the phrase of “service level agreement” be unheard and unspoken, erased from the memory of professionals, for all time.


In keeping with this pronouncement, above is my slide from my session on creating, service access level agreements at the conference. Access Level Agreement is, for now, a placeholder. Other ideas I mulled over where: customer level agreements (too direct), support level agreements (too limiting), and access contract (too legal).

It is time once again to tap into the collective intellectual capacity of the community. Please post your ideas and arguments for or against the correct phrase.

Insights Session – Creating a Partner-based Service Level Agreement

On Thursday, May 20th at 8:00am at Sage North America’s annual partner conference, Insights, I will be presenting a session entitled Creating a Partner=based Service Level Agreement (GEN58).

This session will be dedicated to the possibility that we can create high quality service level agreements with our current customers. Creating such agreements is hard work and not for all partners, as it requires us to think differently than we have in the past about the nature of our relationship with our customers. You are hereby invited to open a dialogue on a new model for servicing your customers.

For those of you who plan on attending the session, please comment below with any thoughts or questions that you would especially like me to address during our time together.

Really, Revenue Recognition, That’s All You Got

While I have heard the objection of revenue recognition to fixed price and service level agreements before, there has been a recent spate of them and my default value reply is to say, “Really, that’s all you got!”

The more detailed answer is to ask, “Are you a publically traded company? If not, there is really no problem.”

This is usually met with silence followed by some mumbling about a possible future creditor using WIP or receivables to secure a loan. The response is then to say, “What about using the signed agreement from your customers? Isn’t that better than time either billed and not collected or time not billed at all? Besides, I recommend you get paid upfront.”

Again, more silence followed by, “Yeah, but if they prepay me, I can’t recognize the income.” My reply, “So, you are complaining that you will have too much cash is the bank? Maybe you won’t need a loan in the first place.”

That usually ends the argument, as if there was one in the first place.

While some objections to pricing on purpose and service level agreements are better than others, this one takes the cake. It is just a non-starter.

Creating a Service Level Agreements

Creating an SLA (Service Level Agreement) is by far the most frequent topic of conversation I have with partners of Sage. I recently came across an mp3 file I recorded while in Sydney, Australia delivering the service level agreement section from Customer Boot Camp, so I have decided to post it.

Please note it is not the best quality recording, but I think you will be able to understand most of it.

If you have any further thoughts or question, please feel free to post them as comments.

UPDATE: As of June 2010, I refer to these as Access Level Agreements not Service Level. I admit I was wrong. Sorry!