What is an SLA?
SLA stands for “Service Level Agreement”. It differs from contracts like those you are presented with when you purchase a software product outright, because an SLA involves a continued level of service beyond the initial purchase transaction. Most managed IT services come with an SLA, including cloud services, cloud-based help desk software, SaaS (Software as a Service), PaaS (Platform as a Service), IaaS (Infrastructure as a Service), DBaaS (Database as a Service), etc.
The SLA establishes a contractual relationship between the customer (the organization that will receive the service) and the vendor (the organization that will provide the service).
What the SLA Says
The SLA needs to be specific about certain parameters of the service to be provided, the payment and payment frequency expected for that service, and what will happen if either side breaks their agreement. Every SLA you sign needs to specify:
- What service is to be provided, including a detailed description of those applications and/or services?
- What each party (the customer and the vendor) are responsible for?
- What level of service is to be provided? (Such as, does the vendor assure the customer of 99.999 percent uptime?)
- What is the duration of said services? (three months? six months? one year? two years?)
- How will the performance of the service be monitored and evaluated, including specific metrics that will used to track and rate the service
- What exactly will happen if the vendor fails to provide this service, or to provide it as promised? (5 percent discount per hour? 10 percent discount per day?)
- If there is a disagreement between the customer and vendor, how will the dispute be resolved? (Third-party arbitrator?)
- How much will the customer pay for the service?
- When are those payments due?
- What happens if the customer doesn’t pay?
What to Do With the SLA
Most vendors have a standard prepared SLA for customers to sign, but this doesn’t mean that the SLA is all-or-nothing. Consider this contract a starting point for your negotiations. Your legal team and other stakeholders in the process (including your IT help desk workers) should review the proposed SLA and determine what, if anything, you would like added or amended in order to address your own priorities. For example, is money a primary concern? Before signing, see if the vendor will negotiate the price or payment arrangement. Perhaps uptime is your most pressing issue? Negotiate a steeper penalty for the vendor if they can’t maintain the uptime promised in the agreement.
Once you are completely satisfied that you understand the SLA and are okay with its content, you can enter into the agreement with confidence that you’re covered in any eventuality.
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