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Service Level Agreement

What is the Purpose of SLA in Outsourcing?

Outsourcing projects have a set of rules called an SLA Agreement (SLA). Their purpose is to clarify what level of service the end-user wants from them. Here is more information about the purpose of SLA. 

SLAs are contracts between service providers and their customers outlining the terms and conditions under which they will supply their services. It’s called the SLA Service Level Agreement. It’s a deal between a service provider and a customer or client. 

When the service provider agrees to this agreement, it is very clear what level of service the end-user wants from them. If the agreed service levels aren’t met, this document explains what to do and pay for. It is very important for the company that decides to outsource one of its services to an outside company.

Application of an SLA

Let’s think about, for example, a telecom company whose contract says that the network will be available 99% of the time. If this promise is not kept, the customer will be able to deduct the downtime from his payment on a pro-rata basis.

sla agreement

Purpose of SLA

SLA Service level agreement is an integral part of a single outsourcing contract. They give information about all of the services they have agreed to provide and about how reliable they should be. They also set out the parameters, responsibilities, and expectations so that no one can say they didn’t know about the service. Clearly, the SLA makes sure that both parties know what they need to do.

Who Provides SLA

Service providers usually have standard service contracts that can be changed to meet the needs of the customer. These contracts can be changed to meet the needs of the customer. This is true even though the document should be changed. For example, the legal department of a client’s company should tell the document.

It is also easy for the customer to change the service contract and say what level of service they want. This will allow the service provider to change its prices and the number of people it has available.

Content in the SLA

The service-based SLA has two important parts:

Managers are in charge of everything from setting standards and methods to reporting and dispute resolution. They also have a way to change the agreement if needed, and they ensure that the client is protected from third-party disputes caused by service-level violations.

If you have any questions about the service, here are some things to know: the types of services you get, what you can’t get, when you can get them, and how much time each level of service lasts, as well as who is responsible for what and how much each level costs.

Content Which you Can Add in SLA

You can add the following content to your SLA.

  • A description of the services that will be done
  • Expectations for service
  • The service metrics
  • The roles and responsibilities of each person or group
  • Applicable punishments or penalties
  • Addition of protocol for services
  • The value of metrics.

The metrics let you know what to do if one of the parties doesn’t do well. The customer might not have given the provider enough information on time, which could hurt the service quality. In this case, the customer can’t get money from the service provider.

The Indemnity Clause in Service-Based SLA

The indemnity clause is very important. Then, the service provider promises to protect the client in the event that the promised services aren’t done.

 As a customer, be sure to ask your company’s legal department, or an outside one, to include this clause, which can be changed if the provider asks for it, within reasonable limits.

The SLA Stays the Same When Provider Changes the Event

People should be aware that the service based SLA may change if there are big changes in the provider. This is important to know. However, this is not the norm. In this case, the client might have to come up with a new deal.

Check the Service Levels 

People who work for providers let their customers see how well their service is going by looking at statistics, which are usually available on the web.

The method used by the provider can be talked about with the customer in order to come up with a better solution that both parties will be happy with.

Ensure the Metrics are Set-Up 

Make sure you know what you want from both the client (as a provider) and yourself. Then, figure out how you want them to act (as a client).

Everything will depend on what the customer does, what he wants, and how well the service provider can show him what he needs. Both parties should work together seamlessly and communicate effectively when there is a problem. This is what the goal is.

Easy-to-read and meaningful metrics must then be used in order for the provider to grow its business and meet the client’s needs. If you want to do this, choose items that can be automatically and quickly picked up. 

It’s not necessary to set up a lot of different metrics. The provider must be able to help the client choose the ones that will let him see how his work is going without overloading him with information.

Among the metrics that are usually looked at are:

  • Rates and availability of the service (time slot) (production failures, missed deadlines, etc.)
  • High-tech quality (defects in delivered products)
  • People need to be safe (data security protection)
  • The business results (key performance indicators).


The SLA agreement takes a lot of time and energy, especially on the customer’s side. However, suppose the company chooses an experienced provider. In that case, it can be sure that its outsourcing will be safe thanks to clear terms, it minimizes losses and damages if the provider fails, and still gets good performance. This agreement is called an (SLA) service level agreement. It’s between two businesses, each of which has the main business. People who sign this contract, which is moral, financial, and legal, help businesses run and grow.

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