Service level agreements, also known as SLAs, are business undertakings that establish the responsibilities of one party to another in connection with the provision of a service. In business terms, the agreement is referred to as a Service Level Agreement (SLA). A service level agreement is actually a legal commitment between a service consumer and a service provider. Certain aspects of the service provided by the service consumer are specified by the agreement between the parties to the contract. For instance, under a service level agreement, the provider agrees not to undertake activities which would result in damage or interruption of normal business operations.
An SLA may stipulate different responsibilities for different services provided by the same company. Under such an arrangement, a company that offers web-hosting service may be liable for issues arising from an attack against a customer’s website, even if the hosting company was unaware of the problem and did not take steps to remedy it. In a similar vein, a company may be held liable for downtime caused by maintenance work, even if the company itself was not responsible for the maintenance works. Such a contingency would be unlikely, however, in case of outsourced services, where the customer is paying only for the service he or she gets.
When a company enters into an agreement with a service consumer, the consumer is usually obligated to pay a certain monthly fee to the company for the use of the service. The fee may be based on the number of users using the service, or may be fixed. The latter is most common in large companies, as they have more than one department that requires using a particular service. Such companies may choose to set a daily fee or a monthly fee for the use of their services.
An SLA typically describes the obligations of service level agreements between consumers and service providers. However, an SLA may actually define what should be covered by a contract, rather than the obligations under such contracts. A service level agreement may actually describe how a company ensures quality services to its customers, and what it does to ensure that those quality services are delivered every time. This may include hiring qualified personnel to perform work related to service maintenance, repairing equipment, and so on. A service level agreement may also include other kinds of obligations, such as those covering intellectual property rights and licensing.
A good contract must lay out clearly all the responsibilities of both parties. For example, a contract may specify that the company must provide sufficient warning before interrupting the customer’s service. This protects the customer from having his work interrupted for reasons unrelated to those specified in the contract. Similarly, a contract may define when a company is required to perform maintenance on its equipment. Without such a commitment, both parties may be in danger of defaulting on their obligations, putting both parties at risk of increased costs and reduced profits.
The proper functioning of a service level agreement is oftentimes in the hands of a specialized legal team. Such teams are made up of highly trained lawyers and administrative professionals. A good SLA will be highly detailed and comprehensive, including not just the mechanical elements of its work but also the details that go along with such detailed actions. In fact, a typical SLA will have an” Exhibit A” listed verbatim, as well as an” Exhibit B” listed verbatim. Such detail is necessary because such language ensures compliance with various statutes such as the Fair Labor Standards Act, the Minimum Wage Act, and the Americans with Disabilities Act.
Such elaborate service agreements are not limited to large, well-known companies with many different services. In many small businesses, the relationship between management and staff is usually quite tight. As a result, these SLAs may not be necessary. For example, many times the owner and/or manager will maintain direct contact with customers, performing work on the job, rather than having a Service Level Agreement in place.
Even where there is no direct interaction between management and staff, a service level agreement can still be beneficial. Such an agreement can help provide a means by which all parties understand what is expected of them, as well as helping to ensure that no job is done improperly delegated. Service levels also help ensure that quality services are rendered by employees, while at the same time preventing undesirable practices in the workplace. Finally, such documents serve as a means of regulating the terms of payment in the case of disputes between customers and service providers.