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The Main Elements of A Good SLA

A service-level agreement (SLA) defines the level of service expected between a service provider and customer. There are three types of SLAs: customer, internal, and multilevel. An SLA specifies metrics to measure service effectiveness and outlines compensation for failing to meet performance standards. Key elements of an SLA include service descriptions, objectives, metrics, obligations, penalties, and a dispute resolution process to ensure expectations are clear and accountability is maintained.

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Franz Lawrenz De Torres
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167 views6 pages

The Main Elements of A Good SLA

A service-level agreement (SLA) defines the level of service expected between a service provider and customer. There are three types of SLAs: customer, internal, and multilevel. An SLA specifies metrics to measure service effectiveness and outlines compensation for failing to meet performance standards. Key elements of an SLA include service descriptions, objectives, metrics, obligations, penalties, and a dispute resolution process to ensure expectations are clear and accountability is maintained.

Uploaded by

Franz Lawrenz De Torres
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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What does service level agreement mean?

A service-level agreement (SLA) sets the expectations between the service


provider and the customer and describes the products or services to be delivered,
the single point of contact for end-user problems, and the metrics by which the
effectiveness of the process is monitored and approved.

The main elements of a good SLA.


-Overall objectives. The SLA should set out the overall objectives for the services
to be provided.
-Description of the Services. The SLA should include a detailed description of the
services.
-Performance Standards.
-Compensation/Service Credits.
-Critical Failure.
There are three basic types of SLAs:
Customer, Internal and Multilevel service-level agreements.

A customer service-level agreement is between a service provider and its external


customers. It is sometimes called an external service agreement.

An internal service level agreement is an agreement between you and an


internal customer (such as another organization, site, or department). For
example, you are the facilities manager and provide maintenance services for the
departments in your company.

Multilevel SLA: The SLA is split into the different levels, each addressing
different set of customers for the same services, in the same SLA.
Why is SLA important?

They set clear guidelines. An SLA is essential in ensuring both parties are on the
same page in terms of standards and service. By making a service level agreement,
a vendor and client have a clearly documented method of working through their
mutual expectations.
Service Level Agreements (SLAs) are often not given sufficient attention when
creating contracts for software development outsourcing. This is a mistake.
That’s because SLA terms are a critical part of any contract with a service provider
such as an outsourcing company for software development or support.
An SLA may be only a few sentences or many pages. Sometimes there is a reference
to “SLAs of an agreement”, which can be confusing. A contract’s SLA consists of
multiple service commitments – and sometimes each service commitment is also
called an SLA.
Critical Components of a Service Level Agreement
The service commitments outlined in an SLA should cover all these essential elements in
clear and specific detail:
Service – the service or action the outsourcing partner provides. For example, your internet
provider gives you internet access.
Measurement – this is a metric that quantifies the service commitment. Using the internet
provider example, the measurement could be 99.999% availability (also known as “five nines
of uptime”).
Interval – the measurement (metric) that must be captured at defined intervals. For example:
“Every time the helpdesk is called..”
“... every month”
“... average of all tickets every month”.
Obligations – some SLAs have obligations that the client and the partner must fulfill in order
for the SLA to be enforceable. Also, it’s a common obligation for the client to declare an SLA
violation, in order to exercise their right to receive a penalty payment from the partner.
Penalty – this is the penalty for failure to comply with the SLA component’s obligations (an
SLA violation). In subscription-based agreements, the penalty a partner incurs will usually be
to credit back a percentage of the monthly subscription. In software development outsourcing,
an SLA penalty is often the loss of a “bonus payment” (or percentage) held in reserve by the
client for a successfully completed project with all SLAs met.
Key Benefits of an SLA
Here’s why you need to have SLAs as part of your contract(s) with a software
outsourcing partner.
Clarify expectations – SLAs help to define and align clear expectations for
performance from the relationship in measurable terms. They keep the outsourcing
partner accountable for delivering on their promises, so there are no surprises.
Focus on customer service – The SLA helps the partner to remain focused on client
requirements and needs. It outlines the specific scope and timing of what is to be
provided to the client, as well as how and when issues will be resolved.
Establish measurable standards – The SLA sets clear standards of performance for
the partner, with key metrics varying based on the project and its goals. The SLA also
should define the frequency and types of reports to be provided.
Outline remedies for non-performance – SLA penalties should incentivize the
partner to fulfill commitments made to the client, and offer remedies if they fall short.
In addition, the SLA should delineate a dispute resolution process to help with
mediation of performance issues.
Key Benefits of an SLA
Here’s why you need to have SLAs as part of your contract(s) with a software
outsourcing partner.
Clarify expectations – SLAs help to define and align clear expectations for
performance from the relationship in measurable terms. They keep the outsourcing
partner accountable for delivering on their promises, so there are no surprises.
Focus on customer service – The SLA helps the partner to remain focused on client
requirements and needs. It outlines the specific scope and timing of what is to be
provided to the client, as well as how and when issues will be resolved.
Establish measurable standards – The SLA sets clear standards of performance for
the partner, with key metrics varying based on the project and its goals. The SLA also
should define the frequency and types of reports to be provided.
Outline remedies for non-performance – SLA penalties should incentivize the
partner to fulfill commitments made to the client, and offer remedies if they fall short.
In addition, the SLA should delineate a dispute resolution process to help with
mediation of performance issues.

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