Service-level agreement (SLA)

Definition

A service-level agreement (SLA) is a formal contract or agreement between a service provider and its customer that outlines the level of service that the provider is obligated to deliver. 

What is a service-level agreement?

A service-level agreement serves as a documented commitment to the quality and performance standards expected from the service provider and defines the rights, responsibilities, and expectations of both parties.

The agreement will outline specific measurable objectives that define the desired performance levels for the services, such as uptime, response time, resolution time, availability, and reliability. Additionally it will include quantifiable metrics used to assess and monitor the performance of the services, which may include key performance indicators (KPIs), benchmarks, and targets.

Furthermore, a clear definition of the roles and responsibilities of both the service provider and the customer will be outlined. This includes any third-party vendors or stakeholders involved in service delivery. The agreement will also define service availability, scheduled maintenance windows, and acceptable downtime thresholds, along with procedures for handling service disruptions and outages.

Terms and conditions related to contract termination, renewal, modification, or renegotiation, including notice periods, termination clauses, and renewal options are also always included in a service-level agreement.

SLAs are commonly used in various industries to formalise service agreements and establish clear expectations between service providers and customers. By defining service levels, performance standards, and accountability measures upfront, SLAs help ensure customer satisfaction, reduce risks, and maintain the quality and reliability of services delivered.

Example of a service-level agreement

Here’s a short example of a service-level agreement between a web hosting provider and a customer:

Service-level agreement (SLA)

Between: XYZ Web Hosting Services (Provider) and ABC Company (Customer)

Service scope:

• XYZ Web Hosting Services agrees to provide web hosting services for ABC Company’s website.

Responsibilities and roles:

• XYZ Web Hosting Services is responsible for maintaining the server infrastructure and ensuring the availability and performance of the website.
• ABC Company is responsible for providing accurate and timely information for any support requests.

Escalation procedures:

• In the event of a service outage or performance degradation, ABC Company can escalate the issue to XYZ Web Hosting Services management for resolution.

Termination and renewal:

• This SLA is valid for a term of 12 months and will automatically renew unless terminated by either party with 30 days’ written notice.

In this example, the SLA outlines the specific service levels, responsibilities, and escalation procedures agreed upon between the web hosting provider (XYZ Web Hosting Services) and the customer (ABC Company). It provides clear expectations and accountability measures to ensure the quality and reliability of the web hosting services provided.