Service Level Agreement Investopedia

Before we go any further, we define what a service level agreement is. Customer-based SLA It is created by a company for a particular customer that covers multiple services. A classic example of a customer-based SLA is that a large company registers with a telecommunications company for multiple services. It can contain a guaranteed availability of 99.9%, on-site engineers, scale-up &scale-down within a set period of time, etc. Examples of type of infringement: non-delivery, late delivery, poorly provided service. It depends on a concrete case. For example, if the service provider is taken over by another entity during the SLA period or merges with another organization, the ASA may need to be reviewed and negotiated. While the SLA may still be in effect, it is important to verify that the new business entity can offer the same level of performance. There is a good chance that the new owner will strive to continue working with existing customers.

In addition to defining the services to be provided, the contract should also document how the services are to be monitored, including how the data is collected and disclosed, how often it is verified and who is involved in the verification. The SLA is usually one of the two fundamental agreements that service providers have with their customers. Many service providers draw up a framework contract to define the general terms and conditions of sale in which they collaborate with their customers. The SLA is often included in the service provider`s framework contract by reference. Between the two service contracts, the SLA adds greater specificity with respect to the services provided and the metrics used to measure their performance. Service Level Management is the SLAs management process that helps companies define, document, monitor, measure, report and verify the performance of the services provided. IT organizations that manage multiple service providers may want to enter into operational level agreements (AEOs) to explain how certain parties involved in the IT service delivery process interact with each other in order to maintain their performance. Exclusions – Specific services that are not offered should also be clearly defined in order to avoid confusion and eliminate the margins of acceptance of other parties.

An operating period is a period of time during which the service is available. Depending on the type of service, a provider should provide minimum availability that is relevant to average customer demand. As a general rule, it is essential that websites, online services or web-based providers are highly accessible, as their activity depends on their accessibility. List of contracts – This first section defines the bases of the agreement, including the parties involved, the start date and the generalization of the services provided. SLA is also called an Operating Level Agreement (OLA) when used in an organization without an established or formal supplier-customer relationship. Example 2: It is the customer`s responsibility to obtain and renew software licenses from time to time. If the support team is asked to install software that is not licensed at or after installation, the legal responsibility lies exclusively with the customer. The customer exempts the service provider and its collaborators from any legal action for the installation and maintenance of unauthorized software. Make sure the metrics reflect factors that are under the control of the service provider. To motivate good behavior, SLA metrics must reflect factors that lie in the control of the extern externator.

A typical mistake is to sanction the service provider for delays caused by the customer`s lack of performance. For example, if the customer provides application code change specifications several weeks late, it is unfair and demotivating to keep the service provider on a predetermined delivery date. . . .