What benefits Service Level Agreement do?

Where one party delivers services to another, it is a good idea to have some kind of agreement setting out the basis on which the service is provided. Such agreements would normally contain, among other things, a description of what is to be provided, the key performance indicators, the way the service is to be charged for (where relevant) and the responsibilities of each of the parties. In ITIL SLM, the agreements between the internal IT service provider and the business customers that it supports are known as Service Level Agreements (SLAs) and it is through SLAs that SLM manages the relationship between itself and its customers.

It would be hard to find IT services provided by IT giants like TCS, Infosys, Wipro etc., where they do not have any accepted/agreed upon SLAs with their customers.

In order to be effective, the SLA must be a written document signed off by all parties affected by it. SLAs are important so they will rarely be agreed without negotiation between the IT service provider and the customer, beginning with a Statement of Intent that sets out the terms, conditions and targets to be agreed. It has to be in a language that both sides will understand, and this means in the language of the customer and not the technical language or jargon of the provider. The SLA defines (in language that has meaning to the customer) precisely what is to be delivered and when and where it is to be delivered. It also defines the standard of quality to be delivered, usually in terms of performance and availability. It will define the responsibilities of both the service provider and the customer. This is important. It makes little sense for a service provider to commit to deliver a service without making it clear what is expected of the customer.

The SLA will include contact details, what should happen if something goes wrong, the way any disputes should be handled, any provisions for redress, the mechanism for getting the SLA changed if necessary and the period over which the agreement will stand unless otherwise changed by agreement. If the service is to be charged for, then the way charges are to be determined and the arrangements for invoicing should be included. Charges may also be included in a separate document, the Tariff, referenced in the SLA.

It is common in IT for individual services to be shared by a number of customers, and individual customers will use a range of services. This means that there is a choice in designing SLAs: they can be customer-based, where an SLA covers a range of services delivered to a particular customer; or they can be service-based, where a common SLA covers all customers of a given service.