Service Level Agreement and its role

A Service Level Agreement is an agreement between an IT Service Provider and an IT Customer or a supplier. It may also be a legally binding formal or an informal “contract” (for example, internal department relationships). They are important for continues improvement and vital in moving towards partnership relations. Corporate IT organizations, particularly those that have embraced IT Service Management (ITSM), enter SLAs with their in-house customers (users in other departments within the enterprise). An IT department creates an SLA so that its services can be measured, justified and sometimes compared with those of outsourcing vendors.

SLAs measure the service provider’s performance and quality in a number of ways. Some metrics that SLAs may specify include:

  • Availability and uptime — the percentage of the time services will be available
  • The number of concurrent users that can be served
  • Specific performance benchmarks to which actual performance will be periodically compared
  • Application response time
  • The schedule for notification in advance of network changes that may affect users
  • Help desk response time for various classes of problems
  • Usage statistics that will be provided.

In addition to establishing performance metrics, an SLA may include a plan for addressing downtime and documentation for how the service provider will compensate customers in the event of a contract breach. SLAs, once established, should be periodically reviewed and updated to reflect changes in technology and the impact of any new regulatory directives

The value of an SLA is that it helps to facilitate a “Service Culture”  within which quality control standards can operate.  In effect, it serves to unify the aim of the provider with the user. It commits the user to forecast volumes and other such operating conditions in return for which the provider omits an agreed level of service, quality and cost.

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