Service Level Agreement

A service level agreement (SLA) is a document that defines the level of service a supplier will give to a customer, or to be more precise the level of service that a customer is prepared to pay for from a supplier.  The Service Level Management process develops the SLA through negotiation between the customer and the supplier.

What is covered in an SLA will depend of the services the SLA applies to but common areas for IT systems include:

  • Service Continuity/Disaster Recovery - Should the service suffer a catastrophic failure how quickly should the service provider bring it back to operation and how much loss of data can the customer tolerate?  If the customer can be without the service for some time and tolerate losing a day's data then this might be an agreement that the service provider would procure a new set of hardware and restore a nightly backup.  If the system is vital to the customer's business and no data loss can be tolerated then the agreement would be that the service provider will run two (or more) copies of the system in parallel, at remote site(s), with data changes to the one in use copied to the other(s) in real time then if the main system fails the copy is brought on line
  • Availability - When should the system be available?  Most systems are only needed during business hours so outside of those hours they can be shutdown for backups and maintenance, and no support teams are required to be available.  Other systems must be available 24 hours a day, 7 days a week so the systems cannot be shutdown without specific agreement from the customer on maintenance windows and backups must be 'On-Line'.
  • Capacity - What volume of data and/or transactions must the system be able to process in a given amount of time.  The more the system must process the more resources it will need.


Under pinning the SLA are usually contracts with third parties (Underpinning Contracts) and Operational Level Agreements (OLA).

An OLA is a type of internal SLA between different areas of the supplier's business.  An Underpinning Contact (UC) is a contract or SLA that the service provider has with it's own suppliers and service providers.

For example an IT supplier may have an SLA that if a standard desktop PC is breaks down and is beyond economic repair (the cost of repairing it is more than it would be worth following repair) then it will be replaced new-for-old with a standard desktop PC within 5 working days.  Supporting this might be an OLA between desktop support and purchasing that all requests for standard desktop PCs received by purchasing by 16:00 will be processed the same day and contracts with the supplier of the PC that orders for a standard desktop PCs will be dispatched, pre-installed with a standard operating system and set of applications, within 48 hours of receipt and with the courier company that they will be delivered by 10am to the customer site.

 Even where the IT Service Provider and Customers are within the same organisation there may be multiple SLAs.  Frequently these will exist in a series of layers.

Corporate level SLAs cover generic needs across the organisation and may include things like how services are charged for, the hours that the Service Desk is open and the Service levels for generic services such as email, network logon, issuing of security passes, amendments to door access permissions etc.

Customer Level SLAs cover needs specific to a particular customer.  For example Finance may need extended service hours or out of hours support during year end processing, HR Payroll may need to suspend backups, or at least change the backup window, for the week before pay day to allow the payroll and BACS to be run.

Service Level SLAs cover the needs of a specific service.