Service Level Agreement

A Service Level Agreement (SLA) is like a promise between two parties. It outlines what services will be provided while meeting quality standards. This agreement ensures that both parties, the service provider and service receiver, understand their responsibilities and what to expect from each other.

Components of an SLA

Service Provider

The service provider is the party who offers the service such as a company, organization, or individual. They are liable to meet specific performance standards and deliver agreed-upon services to the client or service receiver.

Service Receiver

The service receiver or client or customer is the one who receives the service. They are the party that benefits from the services provided by the service provider. They expect adherence to agreed-upon standards and quality benchmarks.

Service Level

A service level refers to a specific standard or level of performance that the service provider (a company or contractor) agrees to meet. It includes things like response time, uptime, or quality of service. The services must align with client expectations and contract terms.


Metrics are measurements used to evaluate performance. The metrics can include things such as:

  • The average response time to a customer inquiry.
  • The percentage of uptime for a website.

Performance Targets

The specific goals that the service provider aims to achieve are known as performance targets. These targets are often mentioned in the SLA and are used to measure the success of the service.


The duties and tasks that each party is responsible for within the SLA are termed responsibilities. This section outlines who is responsible for what actions to ensure that the service runs smoothly.


The fee or other consequences may be imposed on the service provider if they fail to meet the agreed-upon service levels.


The rewards or benefits that may be provided to the service receiver if the service provider fails to meet the terms of the SLA. This could include:

  • Refunds
  • Discounts
  • Additional services

Review and Revision

SLAs are often reviewed and revised periodically to ensure that they continue to meet the needs of both parties. It includes the process of reviewing and updating the SLA as necessary through evaluation, analysis, and potential adjustments with evolving business objectives and requirements.


Termination outlines the circumstances under which the SLA may be terminated by either party. This could include things like:

  • Persistent failure to meet performance targets
  • Significant changes in the business relationship

Key Points

  • A Service Level Agreement (SLA) is a crucial document that outlines the terms and conditions of a service arrangement between a service provider and a service receiver.
  • By clearly defining expectations, responsibilities, and performance targets, an SLA helps to ensure that both parties are satisfied with the services provided.
  • Regular review and revision of the SLA are essential to adapt to changing circumstances and maintain a successful business relationship.