What is SLA (Service Level Agreement)?

abstract picture with sinusoids and alarms that represent the complexity of SLA

What is SLA?

According to ITIL 4, service is “a means of enabling value co-creation by facilitating outcomes that customers want to achieve, without the customer having to manage specific costs and risks.” Service delivery is the primary function of the IT team. And service level agreements are one of the vital tools IT teams use to keep the service’s quality high.

SLAs across industries and in ITSM

Across different industries, a service level agreement is a documented agreement between the service provider and their customers. It defines the provided service itself, the criteria of the service quality, and the sanctions that will take place in case the agreed-upon standards are not met.

For example, your internet provider commits to a specific SLA when you sign up for a plan. This SLA might include such quality criteria as minimal download and upload speeds and the number of devices that can be connected. If the connection is broken, the provider shall restore access to quality internet. For these cases, the maximum request resolution time might also be documented. Thanks to the SLA, the customer has a clear idea about what service level they can count on. This is crucial when the customer’s business depends on internet speed.

Two mans shaking hands in front of a computer in agreement

The components of an SLA

We’ve already named commonly used parts of an SLA above. Let’s detail them to complete the picture.

clock , rockets and paper represents the components of SLA
  • Service definition;
  • Metrics to measure whether the SLA criteria were met;
    First response time, average response time, resolution time, and service availability as a percentage.
  • Contact channels;
    It is essential to mention the relevant contact channels in the SLA, to avoid a situation when users send their requests to a long-abandoned support email address and their issues remain unresolved.
  • Escalations;
    Escalations are sanctions that come into force if quality standards aren’t met. In practice, it might be notifying the manager of the incident owner or reassigning the request to a group of technicians responsible for urgent cases.
  • Review cadence and review procedures;
    SLAs won’t follow your business’ changes automatically and might soon get outdated. Therefore, the structure of the SLAs should allow for changes. A flexible SLA structure goes in line with the Continual Service Improvement principle.

In many cases, the SLA is not a physical document listing some components but a set of technical tools that facilitate high-quality service delivery. The list above doesn’t aim to advise you on how to document your SLA, instead, we want to give you more clarity on what constitutes SLAs.

Types of SLAs

The structure of service delivery differs depending on the organization’s needs. Accordingly, there are several types of SLAs:

customer based SLA infographics

Customer-based SLA.

These are SLAs that are tied to a particular customer. If the customer uses several services, a customer-based SLA will cover all of them. For example, IT teams might have separate agreements with each department they provide services for, with the departments acting as single clients.

service based SLA infographics

Service-based SLA.

These are SLAs that apply to all customers of one service. For example, when choosing a Spotify plan, you practically choose between different services. The SLAs here aren’t tied to a specific customer, rather, each customer selecting one of the plans signs for a particular SLA.

multi-level SLA infographics

Multi-level SLA.

Multi-level SLAs have various layers: corporate level, customer level, and service level. The corporate level describes “general” SLAs relevant to all organizations. The customer level details SLAs for each customer (department). The service level covers SLAs for a specific customer group in a particular service. For instance, a printer maintenance request from a CEO and a temporary worker might be assigned different SLAs. Such a detailed configuration becomes possible thanks to a multi-layer SLA structure within the company.

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Operational Level Agreements: helping achieve SLAs

Operation level agreements (OLAs) are agreements between various parties involved in service delivery. While one team gets incidents assigned, resolving the incident might require help from other departments. (Read more about Incident management) For example, during employee onboarding, the HR department will need help from the financial department to set up a banking account. Moreover, to ensure that the new employee receives a place in the open space, you’ll need help from someone in the facilities team. Documenting relationships between different parties involved in service delivery will help the primary service provider keep quality high.

OLAs are structured to maintain the main SLA. For example, if the resolution time for the employee onboarding service is two business days, the resolution times for all the needed “supplies” must be within that timeframe.

SLA Management

Service Level Management is a set of organizational processes and procedures aimed at maintaining SLAs and delivering services at the established service level targets.

SLAs are tied to specific services, and each service can have multiple SLAs for every quality level. For example, restoring access to the Intranet portal might be of higher priority for the HR department than for sales managers in some companies. As a result, an Intranet access incident reported by an HR manager will have a different SLA than an incident coming from a sales representative.

Here is an example of how SLAs bring value to IT support. The monitoring system checks the availability of a particular service, for instance, a CRM system. In the event of a service failure, it interacts with the Service Desk, submits Incidents, and sets response and resolution times according to the SLA associated with this service. An SLA typically has an incident resolution guideline that must be followed to ensure no SLA violation occurs during the resolution process.

Users can also manually create incidents when they face issues like a jammed printer in the common area, a non-reacting laptop screen, or a slow internet connection.

The team sometimes fails to resolve an issue timely, within SLA requirements. The incident is then escalated to a higher level. Escalations may include, for example, notifying the manager of the incident owner or reassigning the request to a group of technicians responsible for urgent cases.

SLA implementation effects

The primary purpose of service level agreements is to maintain a level of IT services that would help the business achieve its goals. Besides guaranteeing the quality of services, SLA implementation may bring other advantages.

Building trust between IT and other departments

With implemented SLAs, end-users have higher visibility into IT processes and may know in advance, for example, the request resolution times.

Improving work processes within IT

SLA implementation creates a mechanism that assigns a priority level to each request. In practice, this is done either automatically or involving a technician who determines the priority based on the request description. As a result, more and less urgent requests will fall into separate buckets, and the team’s time will be managed better. Read more about Request Management.

Measuring the IT team’s success

SLAs set clear objectives for the IT team, making it easier to evaluate their performance. In particular, SLAs are widely used as internal KPIs among IT support teams.

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