Last edited 18 Jun 2015

Service level agreement SLA

A service level agreement (SLA) sets out in detail what a service provider is required to provide as part of the agreement and the standard that the services they provide must achieve.

Service level agreements can be prepared within an organisation, describing the services required from an in-house team or department, or they may be used for the outsourcing of services, such as facilities management services. This might include; property management, inspection and repair services, planned and responsive maintenance, cleaning, portering, security, ICT services and so on.

The SLA might set out:

  • The overall objectives and priorities for the services to be provided.
  • A detailed description of the individual services required, setting out included and excluded services.
  • The performance standards required for each service (such as availability and responsiveness).
  • Key performance indicators.
  • Penalties for failing to achieve the required services levels.
  • Incentives for high levels of performance.
  • Safety rules.
  • Emergency procedures.
  • Legislative requirements.
  • Complaints procedures.
  • Insurance requirements.
  • Agreement period.
  • Termination rights.
  • Charging arrangements.
  • Price review mechanisms.
  • Details of key personnel, contract administration, monitoring, reporting, meeting requirements and so on.
  • Change control procedures.

This is a legal agreement, and it is very important that the client considers what it should contain and is happy with the terms agreed. Standard agreements provided by the service provider might not adequately represent the client’s requirements.

Preparing an SLA can be a complex process, describing requirements that may previously have been provided by a number of different parts of an organisation, structured and managed in a variety of ways. Care must be taken not to specify a higher level of service than is actually required or has been provided in the past. This can involve complex consultation with a wide range of stakeholders and detailed assessment of the standards actually required.

Service level agreements tend to specify the outputs required from the service, rather than defining how the service should be provided. They may be divided into two components:

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