What is SLA (Service Level Agreement)?
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 service doesn’t meet the agreed-upon standards.
For example, your internet provider commits to a specific SLA when you sign up for a plan. In the first line, this SLA might include quality criteria such as minimal download and upload speeds and the number of devices that can join the network. If the connection is broken, the provider shall restore access to quality internet. So another performance metric might be the maximum incident resolution time. Thanks to an SLA like this, 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.
The components of an SLA
We’ve already named some typical components of an SLA above. Let’s detail them to complete the picture.
Service definition
Service definition outlines the services that the service provider will deliver to the customer. It should include a detailed description of the services, the expected level of performance, and any exclusions or limitations.
Service level targets
Service level targets define the specific performance targets that the service provider must meet in order to fulfill the SLA. The targets may include metrics such as first response time, average response time, resolution time, and service availability as a percentage.
Responsibilities and roles
This component outlines the roles and responsibilities of both the service provider and the client, including who will be responsible for what tasks and how communication will be handled.
Contact channels
It is essential to mention the relevant contact channels in the SLA. Imagine users sending their requests to a long-abandoned email address. This might damage customer satisfaction and the company’s reputation significantly.
Escalations
Escalations are sanctions that come into force if the service doesn’t meet the quality criteria. Such sanctions might include notifying the manager of the incident owner or reassigning the request to a group of technicians responsible for urgent cases.
Termination and renewal
SLAs won’t follow your business’ changes automatically and might soon grow out of date. 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.
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.
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.
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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