Service Level Agreement

A Service Level Agreement, or SLA, is a vital part of any service contract wherein the mutually agreed level of services to be provided by the service provider to the customer is defined. Every customer requires guaranties and warranties on the services they are buying. Also, every IT solution provider should know what his obligations are when he has agreed to provide service to the customer i.e. key service targets and responsibilities. Hence SLAs should be defined as accurately as possible because a well defined SLA leaves little room for ambiguity.

ITIL, Information Technology Infrastructure Library, provides good-practice guidance on the design of IT services, processes, and other aspects of the service management effort. Service Level Management is covered under the broad category of Service Design.

The key aspects of SLAs can be described as services to be delivered, level of services to be delivered, quantitative and qualitative metrics for measuring those services, duties and responsibilities of the recipients, duration of the agreement, problem-resolution procedures and termination of the service agreement.

Take the example of a software company developing a web based application for a customer. The software company and the customer need to mutually agree upon the service, level of service and eventually add them into SLA.

The agreement may include the application / system uptime to be 99.9%. If this is not delivered as per the SLA, the client can come back and indicate the degradation in system performance as compared to the terms agreed to in the SLA. Looking this example, it is clear that SLAs are mutually beneficial for both the service provider as well as the customer.

OLAs and KPIs are a few terms associated with SLAs. OLA (Operational Level Agreement) is an agreement between internal support groups of an institution that supports the SLA. OLAs are defined to address and resolve the IT problems by setting the criteria and defining the IT services that each department is responsible for. For the above mentioned example the OLA would be what the server team will do for patching of the servers, what the DBAs will do to optimize the databases, etc.

KPI (Key Performance Indicators) is mainly used by the service provider for evaluating their customer’s satisfaction level. A KPI is a tool to measure performance and in association with the SLAs it measures the performance of the services agreed in the SLAs. If KPI is above the least possible performance criteria, then service provider can claim that their customer satisfaction is decently high but if it is less than the least performance criteria then customer is said to be dissatisfied with the services offered by the provider.

Risks of not having a SLA: 

• Customer will not have a clear idea of what level of service, performance of the services, issue escalation, responsibilities of both the parties, guaranties and warranties of the services, support services etc.
• Service provider will not have a clear idea of what are the expectations of the customers with respect to services, level of services, problem resolution, priority in which services are required, issue escalation which may later lead to argument and blame game.
• Lack of a proactive process responsible for delivering measurable benefits to the business.
• Poor communication channel between the customer and the service provider leading to increase in mean time to resolve any issue.

Benefits of SLA:

• Promotes a service quality culture.
• Ensures clear performance expectations and end users satisfaction with service offerings and service levels.
• Allowing the customer a simple way to monitor performance.
• Improved service availability and therefore better productivity.
• Line of action in case of failure of delivery is defined in most of the cases.

A well defined, documented and mutually agreed SLA is effective and beneficial to both the customer and the service provider. SLA helps in developing a true partnership between both the parties, ensures all the targets and measures agreed upon are monitored periodically and achieved as agreed.

With Manage IT as your IT solution provider, with its ITIL based Service Level Management Process helps you enhance your IT services efficiently.

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About Author:

Dimpy Thurakhia is a consultant in Systems Plus Pvt. Ltd. Within Systems Plus, she actively contributes to the areas of Technology and Information Security. She can be contacted at dimpy.t@spluspl.com