Service-level agreement

A service-level agreement (SLA) is defined as an official commitment that prevails between a service provider and the customer. Particular aspects of the service – quality, availability, responsibilities – are agreed between the service provider and the service user. The most common component of SLA is that the services should be provided to the customer as agreed upon in the contract. As an example, Internet service providers and telcos will commonly include service level agreements within the terms of their contracts with customers to define the level(s) of service being sold in plain language terms. In this case the SLA will typically have a technical definition in terms of mean time between failures (MTBF), mean time to repair or mean time to recovery (MTTR); identifying which party is responsible for reporting faults or paying fees; responsibility for various data rates; throughput; jitter; or similar measurable details.

A service-level agreement is an agreement between two or more parties, where one is the customer and the others are service providers. This can be a legally binding formal or an informal "contract" (for example, internal department relationships). The agreement may involve separate organizations, or different teams within one organization. Contracts between the service provider and other third parties are often (incorrectly) called SLAs – because the level of service has been set by the (principal) customer, there can be no "agreement" between third parties; these agreements are simply "contracts." Operational-level agreements or OLAs, however, may be used by internal groups to support SLAs. If some aspect of a service has not been agreed with the customer, it is not an "SLA".

SLAs commonly include many components, from a definition of services to the termination of agreement. To ensure that SLAs are consistently met, these agreements are often designed with specific lines of and the parties involved are required to meet regularly to create an open forum for communication. Rewards and penalties applying to the provider are often specified. Most SLAs also leave room for periodic (annual) revisitation to make changes.

Since late 1980s SLA's have been used by fixed line telecom operators. SLAs are so widely used these days that larger organizations have many different SLAs existing within the company itself. Two different units in an organization script a SLA with one unit being the customer and another being the service provider. This practice helps to maintain the same quality of service amongst different units in the organization and also across multiple locations of the organization. This internal scripting of SLA also helps to compare the quality of service between an in-house department and an external service provider.

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