Service Level Agreement (SLA)

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A service level agreement (SLA) is a contractual agreement setting out the detailed terms under which an ongoing service is provided.

• can be a:
  • legally binding formal contract between supplier and customer businesses
  • less formal agreement
    • SLA agreed on between internal departments
• requirements define:
  • aspects of the service, such as scope, performance characteristics,
  • responsibilities agreed upon between service provider and customer
  • specific performance metrics, quality standards, response time, cost, and service levels expected from the vendor
  • penalties for failing to meet them
  • time frame for service delivery
  • contact information for both parties
  • payment terms
• essential to have a service-level agreement in place when providing any service
  • serves to protect both parties and helps to manage expectations