What is mean by SLA ( Service Level Agreement) with Examples?

In my previous articles i have given the hierarchy of production support in real company as well as information of L1 ,L2 and L3 responsibilities.In this article we will check about what is SLA alias Service level agreement with real life industry examples.An SLA stands for Service level agreement which is formal contract or agreement between the service provider and customer. The SLA includes multiple things like Service expected,measurable metrics, responsibilities and penalties for non compliance. SLAs are commonly used in IT services ,cloud computing ,telecommunication industry and other industries to define set of rules and regulations agreed between company /service provider and customer.

What are key components of SLA?

There are following key components of SLA :

1.Service Scope :

This component describes the multiple services covered like IT support services, cloud storage.

2.Performance metrics

It defines the measurable standards like – Uptime of system ,Incident response time ,Incident resolution time etc.

3.Responsibilities:

This component describes responsibilities of service provider and customer.

4.Penalties :

This component includes the penalties service provider requires to pay if they miss SLA.

5.Reporting :

This component describes the reporting and monitoring of the SLA.

Some SLA Examples

1.IT Support SLA :

Scenario of SLA :

XYZ company is providing IT support to Salesforce application.

SLA Terms :

Response time for Issue :

P1,P2 : Critical issues will receive response in 15 mins

P3,P4 : Low priority issues will receive response in 1 Hour.

P1,P2 Resolution Time : Critical issues needs to be resolved in 4 hours else 1000$ per hour penalty

P3,P4 issues : Low priority issues needs to be resolved in 48 hours else 100$ per hour penalty.

Availability : Support available 24/7

Example Metrics : If server is not working and server crashes , the IT team must respond within 15 mins and open the bridge call within 15 mins to add all stakeholders.

Scenario 2 : Internet Service Provider SLA

Scenario : To provide network connectivity to client

Uptime : The internet should be available 99.7 %

Response time : If Any fault in network the network team needs to respond in 1 hour and make sure that network is stable in 2 hours.

Example : If internet is down more than guaranteed up-time in the SLA then customer may raise refund request to service provider.

Benefits of SLA :

1. Clarity between multiple parties : The expectations has been defined clearly between the parties will give the clarity .
2. customer assurity : builds trust between service provider and customer regarding gurrenteed service providing .
3. accountability: Service provider is accountable to provide specified service in defined timeline .
4. Issue resolution time : customer is having clear direction regarding timeline of the issues resolution.

These are some examples of SLA with real time industry examples.The SLA will be helpful to build trust between service provider and customer .