Service Level Agreement (SLA)

Posted in Marketing and Strategy Terms, Total Reads: 1477
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Definition: Service Level Agreement (SLA)

Service Level Agreement or SLA is a contract between a service provider and its customer. The contract specifies the level of service the customer is buying or the service provider is providing. More generally, internet service providers (ISP) these days provide service level agreements to the customers explaining in simple language the levels of service being bought by the customer.

Recently, IS departments in organizations have introduced the concept of SLAs in the system so that their customers i.e. personnel from other departments have a fair understanding of the service in a measurable, justifiable and a comparable manner.

Apart from description of the services being provided, the SLA should also include metrics to measure performance. Some of the popular metrics found in SLAs are:

  • Percentage of time service will be unavailable
  • Service rate
  • Response time
  • No. of users who can be served simultaneously

Example: Common examples of SLAs would include all agreements you as an individual accept each time you install an application on your computers, laptops, PCs, smartphones, etc. A specific one would be something like the agreement Microsoft makes you accept before installing its products.

 

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