What is Service Level Agreement (SLA)?

Definition: Service Level Agreement (SLA)

A Service Level Agreement (SLA) is a binding contract between a provider and a customer that defines the service, the performance targets (service levels), how they’re measured and reported, the responsibilities of each party, and what happens when targets aren’t met (credits, remedies, escalation). If you’re asking what is Service Level Agreement, think of an SLA as the rules of the road that turn promises into verifiable outcomes—availability, response time, time-to-repair, quality—and keep both sides aligned.

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Why SLAs matter (and the trap teams fall into)

SLAs translate strategy into operational expectations. Done well, they protect your business with clarity: you know what “good” looks like, how it’s measured, and how issues get resolved. Done poorly, SLAs become marketing headlines (“five nines!”) with hidden exclusions and no real recourse.

Common trap: focusing on percent uptime alone. What you feel day-to-day is time-to-acknowledge, time-to-restore, change quality, and communication. Anchor your SLA to business outcomes, not just big numbers. For context on contracting and risk, see What should you look for before signing an IT contract? and Considerations for Choosing an IT Outsourcing Provider. If your SLA involves cloud controls, pair it with operating guidance from Managing Security With a Cloud Infrastructure and availability patterns in Managed Private Cloud Hosting: A Quick Guide.

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Core components of an SLA (what to include and why)

A short orientation first: a strong SLA tells you what’s covered, how it’s measured, who does what, and what happens when things go sideways.

1) Service definition and scope

Plain-language description of the service, supported features, and in-scope locations/users/workloads. Include a service catalog entry if multiple tiers exist.

2) Service levels and targets

State the metrics, targets, and measurement windows. Examples:

• Availability/uptime: e.g., 99.95% monthly for production.
• Performance: page/API latency thresholds, call quality (MOS), packet loss/jitter bands.
• Support response & restore: time to acknowledge, engage, and restore by severity.
• Change quality: change failure rate, mean time to recovery after changes, maintenance discipline.

3) Severity matrix and escalation

Define Severity 1–4 with crisp business impact (e.g., Sev-1 = total outage). Map to ack/restore targets, the on-call path, and when leadership gets paged.

4) Maintenance windows and change notifications

Publish standard windows, blackout dates, lead time for notice (e.g., 7–10 business days), and expectations for customer approvals on impactful changes.

5) Measurement, reporting, and evidence

Explain how metrics are captured (provider telemetry, synthetic checks, third-party monitors), where they’re published (portal, monthly report), and audit rights to verify.

6) Remedies and service credits

Spell out credits for breaches (formula, cap, how to claim), plus make-good actions (e.g., root-cause report in 5 business days with preventive steps and deadlines). Credits should not be your only remedy for chronic failures—retain termination for cause.

7) Exclusions and force majeure

Reasonable carve-outs (e.g., customer-caused outages, acts of nature), but watch for over-broad exclusions like “internet problems” if the service is Dedicated Internet Access with a specified CIR—the access loop and NNI are in scope.

8) Security and compliance expectations

Baseline controls (MFA, encryption, logging), incident notification timelines, and cooperation during audits. Tie to your GRC obligations.

9) Data handling and exit

Backups, retention, data portability, and assisted exit (export formats, timelines). The best SLA anticipates the end of the relationship cleanly.

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SLA vs. SLO vs. KPI vs. OLA (clear definitions)

• SLA (Service Level Agreement): The contract with external remedies.
• SLO (Service Level Objective): The internal target (often tighter than SLA) that engineering/support aim to meet.
• KPI (Key Performance Indicator): Metrics you track to run the service (e.g., backlog age, CSAT).
• OLA (Operational Level Agreement): Commitments between internal teams (e.g., NOC to Help Desk) that underpin the customer-facing SLA.

Good providers expose SLOs and KPIs to show how they’ll hit the SLA, not just if they did.

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Typical SLA targets by service (examples you can adapt)

A paragraph first: tune numbers to business impact—payments and contact center voice deserve tighter targets than a long-running batch job.

• Network (SD-WAN, DIA, E-Line):
  Availability 99.9–99.99% monthly; MTTR ≤ 4 hours for Sev-1; jitter/loss caps per class; turn-up testing (Y.1564/RFC 2544) on delivery.
• UCaaS/CCaaS:
  Call setup success ≥ 99.9%; MOS ≥ 3.8 for 95th percentile; contact center first response in < 30 seconds during business hours.
• Security operations (SOC/MDR):
  Human triage in ≤ 15 minutes for critical alerts; containment (isolate host/revoke tokens) in ≤ 60 minutes once confirmed.
• Help Desk:
  First response in ≤ 30 minutes (P1), ≤ 4 hours (P2); FCR rate target; CSAT ≥ 4.5/5 for closed tickets.
• Cloud/hosting:
  Availability 99.95%+; RPO/RTO per tier; backup success ≥ 99%; change success rate ≥ 98%.

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How to negotiate an SLA (without the drama)

Start with use cases, not slogans. What do users notice when things break? Negotiate the few metrics that matter:

1. Tie targets to impact. If a missed restore target halts revenue, make that metric hard and well-credited.
2. Ask for transparency. Portal access to raw metrics, postmortems for major incidents, and named service owners.
3. Guard against fine print. Limit exclusions, require diversity statements for “protected” circuits, and define what counts as downtime (degraded vs. hard down).
4. Make credits automatic. No ticket gymnastics—breach detected → credit applied. Add chronic breach clause for exit without penalty.
5. Link to security obligations. Notification windows, cooperation in forensics, and evidence delivery timelines.

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Operating the SLA (turn promises into practice)

An SLA works when it’s part of your weekly rhythm:

• Instrument & verify. Don’t rely solely on the provider’s numbers; run synthetic probes and APM/observability for user-level metrics.
• Review monthly. Track SLA/SLO attainment, incident trends, and change quality; publish “you said, we did” improvements.
• Escalate early. Share leading indicators (capacity, error budgets burning) before they become breaches.
• Map to your business calendar. Freeze windows around launches or quarter-end; coordinate maintenance.

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Common pitfalls (and how to avoid them)

Here’s the trap: headline targets with buried definitions. “99.99% uptime” that excludes planned maintenance during business hours or defines “available” as “control plane is up even if media plane is failing” won’t help your users. Another trap: credits that cap at a tiny fraction of impact, turning remedies into tokens. Also watch for SLAs that measure monthly aggregates—single large outages can “average out.” Fix it by defining what users feel (transaction success, MOS, restore time), adding per-incident remedies, and capping maintenance during business-critical windows.

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SLA examples aligned to common architectures

• Remote/Home workers: Pair SD-WAN home kits with SSE access; monitor meeting quality. SLA focus: voice/video MOS, failover hit time, ZTNA success rate.
• E-commerce front end: Put public endpoints behind WAAP and DDoS Mitigation, measure p95 latency and checkout success; SLA focus: latency/error rate under load and protection response times.
• Private apps: Publish via ZTNA with device posture checks; SLA focus: auth success, token issuance latency, and incident notification windows.

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Tie SLAs to contracts and governance

SLAs don’t live alone; they sit inside Master Service Agreements and Order Forms. Ensure references are consistent across documents, and align with your GRC program so audit evidence (change logs, incident reports, backups) is captured. If you outsource operations, map provider SLAs to your internal OLAs so the Network Operations Center (NOC), Help Desk, and Security teams can actually meet the promise.

For more background on contracting and risk, see What should you look for before signing an IT contract? and Considerations for Choosing an IT Outsourcing Provider.

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Implementation roadmap (practical and phased)

You don’t need a moonshot; you need clear baselines and quick wins.

1. Define outcomes. Choose 6–8 metrics that users feel (restore time, MOS, p95 latency, Sev-1 ack).
2. Draft the SLA. Fill in scope, targets, measurement sources, escalation, credits, and exclusions.
3. Instrument. Stand up APM/observability and synthetic checks; verify provider telemetry matches yours.
4. Negotiate & sign. Lock definitions, automatic credits, and chronic breach clauses; align maintenance windows to business dates.
5. Operationalize. Build monthly reviews, publish dashboards, and tie SLA breaches to after-action improvements with owners and deadlines.
6. Revisit quarterly. Tighten targets where maturity grows; expand scope as services evolve (new regions, new channels).

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Related Solutions

SLAs become powerful when the underlying services are built to measure and deliver. Managed Network Services watches circuits and devices 24/7 so availability and MTTR targets are real, while SD-WAN and Dedicated Internet Access (DIA) provide deterministic performance you can contract against. For cloud pathways, Interconnection reduce jitter to provider regions and make latency SLAs achievable. On the security front, Security Information and Event Management (SIEM) feeding a Security Operations Center (SOC) enables response-time SLAs you can audit.