What is an SLA? It sounds like a complicated abbreviation, but it's actually something quite simple - a Service Level Agreement (SLA). In short, the SLA definition is like the contract with your internet provider who promises you that you'll always have fast Wi-Fi - and if you don't, you'll get compensation (let's hope *smile*). The Service Level Agreement is a document that specifies which SLA and service provider services a provider provides for you and how good they must be. And, of course, it also states what happens if the performance criteria in the SLA may not turn out as well as planned.
Especially in the IT world, SLAs are the Holy Grail. Service Level Agreements ensure that you can rely on certain standards. If these standards are not met, there are clear rules outlining what happens next. SLAs exist not only between companies and external service providers, sometimes they also define how two departments within a company work together.
A Service Level Agreement (SLA) not only determines which services you receive, but also how performance is measured. If everything goes smoothly, you get a thumbs up. If not, well, ... hopefully there's more than just an excuse.
Why is a Service Level Agreement (SLA) important?
A Service Level Agreement (SLA) is extremely important. It creates clarity and transparency between the service provider and the client by defining precise expectations, as well as the scope and quality of the services. This ensures that both parties share the same understanding of the service to be delivered. It also establishes customer satisfaction through SLAs. It protects both the client and the contractor, as it includes clauses to address potential performance issues, for example through:
- Compensation - SLA violations
- Termination of the SLA contract
- Contractual penalties with regard to the performance criteria in the SLA
This would come into force if the agreed Service level agreements are not achieved or adhered to. At the same time, it helps the service provider to set clear targets and continuously monitor its own performance. A well thought out SLA therefore not only promotes smooth cooperation, but also creates trust and reliability.
How to define realistic SLAs for your IT services
The most important thing is not to overdo it and not to make the SLA so difficult that it becomes impossible to meet. The Service Level Agreement must be realistic.
What we often see are unrealistic Service Level Agreements (SLAs). If you were handling the task within your own company, you should apply the same logic to outsourcing the task. This way, both you and the service provider will be satisfied.
SLAs in practice: examples for different industries
There are different types of Service Level Agreements (SLAs). Here are some Service level agreements:
Multilevel SLA
This is where it gets interesting. With this type of SLA there are different levels that cover more than two parties or several service levels in one clear package. The way this works is that a company offers different service levels depending on how much a customer pays:
- An example: It is a product for which there are different packages, e.g. Pro and Premium plans - "Do you want to roll out the red carpet, or is the bare essentials enough for you?"
- It can also be an agreement between several parties, e.g. between an organization and several providers.
SLA at customer level
This is the classic individual agreement between a service provider and a customer. It specifies which services are to be provided, how they are to be provided and what objective they are to achieve.
Service level SLA
This is the agreement that is the same for everyone. One service provider offers the same service standards to all customers, with no exceptions. Perfect for companies that want to keep things simple and standardized:
An example would be if an IT support team uses a standard SLA for all customers - "You have a problem? We guarantee to respond within 24 hours.
The most important components of an SLA: What do you need to look out for?
What should be in a Service Level Agreement (SLA) stand? We give you an overview. Here are a few points:
- Description of services: These should be included everytime, as they describe what needs to be done.
- Performance monitoring: How is performance measured and documented?
- Scheduling: This is also very important. When and under what circumstances can the contract be terminated and what is the notice period?
Some examples of what types of service levels should be measured are:
- Errors that occur
- Response time
- Security
- Results
- Availability
There are more points, but these are the main ones.
How SLAs can help improve IT security
Zeitarbeit International can support you in creating Service Level Agreements (SLAs). Service Level Agreements are extremely important — and here’s why:
- Definition of safety standards
- Monitoring and reporting
- Escalation processes
- Risk management
- Improved communication
All of this helps you identify issues more quickly and therefore increase your IT security. Contact us today so we can assist you with SLA and outsourcing.