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What is a Service-Level Agreement?

Service-Level Agreement or an SLA is a contract between a service provider and its customer. The customer can be either internal or external, depending on the organization and service arena. Through an SLA, a service provider states the terms that they can do the required work. An SLA helps service providers describe the scope of work and by doing so exempts them from any unwanted liability.

For customers, an SLA gives them a clear idea about the work that can be done and any exclusions, which helps them compare the service provider with others and make an informed decision.

What Does A Service-Level Agreement Consist Of?

A basic Service-Level Agreement acts like a list, which usually defines what work can be done and what is excluded. Through this agreement, both parties are informed about the duties and scope of work that is to be done.

Implementation

In an SLA, this covers the scope of work. The service provider lists out the activities that are involved in the implementation of the services and the level of support offered by the service provider.

Performance

An SLA consists of performance metrics that list outcomes and certain agreed-upon outputs that are expected from both the parties.

Financial Requirements

The SLA has to mention financial arrangements such as fee structures, adjustments, hikes, etc. Complete transparency is expected while listing out any variable factors.

Operational Responsibilities

The activities that fall on the service provider that is relevant to the operational requirements of the service.

Governance

Questions like ‘Who does what? Why? Who answers for results? Who decides what?’ are answered in the agreement.