What is an SLA? Practices for Service-Level Agreements

A service level agreement SLA Definition the level of service you expect from a provider, identifying the measures by which the service is measured, as well as solutions or penalties if the agreed service levels are not reached. It is an essential part of any technology supplier contract.

SLAs are an essential part of any outsourcing contract and technology provider. In addition to the list of expectations in terms of type and quality of service, SLA provides solutions when the requirements are not met.

Below you will find answers to common questions about Service Level Agreements and advice on how your organization can develop valid service level agreements with its suppliers and partners.

What is an SLA?

A service level contract (SLA Meaning) defines the level of service expected by a supplier's customer, establishing the parameters by which this service is measured and the solutions or sanctions, if any, if the agreed service levels are not achieved. Typically, service level agreements are between companies and external suppliers, but they can also be between two departments within a company.

The SLA of a telecommunications company, for example, can promise 99.999% network availability (for people who do not have a mathematical inclination, this represents approximately five minutes and fifteen minutes of downtime per year, which you believe or no), it may still be too long for some). Companies) and allows the customer to reduce their payment by a certain percentage, if not met, usually on a variable scale, depending on the extent of the violation.

Why do I need an SLA?

SLAs are an integral part of an IT provider contract. An SLA gathers information on all the services contracted and their expected reliability agreed in a single document. They indicate the parameters, responsibilities, and expectations so that in the event of a problem with the service, none of the parties can claim ignorance. Ensures that both parties have the same understanding of the requirements.

Any significant contract without an associated SLA (reviewed by legal counsel) is subject to deliberate or inadvertent misinterpretation. SLA Management protects both parties to the agreement.

Ideally, SLAs should be aligned with the technology or business objectives of the engagement. Misalignment can harm the price of the contract, the quality of the service provided, and the customer experience.

Who provides the SLA?

What is SLA Most service providers have a standard, sometimes several SLAs that reflect different levels of service at different prices, which can be a good starting point for negotiations. However, they should be reviewed and modified by the client and legal advisors, as they generally focus on the provider.

When submitting a request for quotation, the client must include the expected service levels as part of the application; This will affect the offers and prices of the suppliers and may even influence the supplier's decision to respond. For example, if you need 99.999% availability for a system and the provider cannot meet that requirement with the detailed design, you can offer a different and more robust solution.

What are the critical components of an SLA?

The SLA should include components in two areas: services and management.

The elements of the service include specific details on the services provided (and what is excluded in case of doubt), the conditions of availability of the service, standards such as the time window for each level of service (the maximum public timetable and schedule O the maximum audience may have different levels of service, for example), responsibilities of each party, escalation procedures and compensation for costs/services.

The management elements should include definitions of measurement standards and methods, reporting processes, content and frequency, a dispute resolution process, a compensation clause that protects the customer from disputes with third parties in due to service level violations (this should already be covered in the contract), and a mechanism to update the agreement if necessary.

This last article is critical; Service requirements and provider functionality are changed; therefore, there must be a way to ensure that the SLA is updated.