IT Service Level Agreement
The What And The Why Of SLAs

The IT service level agreement contains a common understanding (between the client and service provider) about the services, priorities, responsibilities, guarantees and warranties.

It can contain "levels" of availability, serviceability, performance, operation, billing etc for each of the areas of service. Sometimes the levels of service have targets and minimum expectations.

SLAs are the key method within ITIL and IT Service Management for defining how the two organizations have agreed that a specific service will be delivered by the supplier to the client.

The SLA contains the "levels" or standards to which it will be delivered and typically covers these categories:

• Definition of the services.
• The standards of the service by which it will be measured.
• The delivery timetable.
• Responsibilities of the supplier and client.
• Provision for legal and regulatory compliance.
• Mechanisms for monitoring and reporting the service.
• Problem management and how issues are to be resolved.
• Confidentiality, non-disclosure, warranties.
• Disaster recovery.
• Termination of the agreement.

The IT outsourcing agreement usually involves the transfer of responsibilities and duties from the organization to the supplier. There's a contract and within that contract is the SLA.

In the contract, there will be financial penalties for SLA provisions being missed. As mentioned elsewhere in this website, it's extremely important that SLAs be negotiated up front as part of the outsourcing contract.

Additional Points of Interest

The IT Service Level Agreement can be a weighty document. Here are some other things to bear in mind.

• If you have agreed levels of service, then you MUST have an agreed method to monitor performance and how exceptions are to be dealt with.
• Build periodic performance reviews into your SLA. If your business needs change, you may require different performance criteria. If there are technology improvements implemented, these may well change your monitoring requirements as well as performance criteria and penalties.
• SLAs are normally between two separate organizations. They can also be used between two divisions within the same organization.
• If you build an SLA with your service provider and he sub-contracts work with another service provider, then you need to make sure your SLA includes that sub-contractor.
• SLAs must be mutually agreed upon. They're not designed to be a weapon for one organization to beat up on another organization because of poor existing services. These performance issues MUST be resolved before the SLA is built.

Recommendations

As suggested in other pages of this website, if you're new to the world of IT outsourcing, don't try to build an IT Service Level Agreement on your own. Instead, hire a IT outsourcing consultant who's experienced and skilled in this process and can help you avoid costly mistakes.

Some great resources are available to help you build an SLA. For example, there's an SLA tool kit and a Service Level Agreement template that provides you with a proven framework to build on.

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