Service Level Agreement
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A service-level agreement (SLA) is a commitment between a
service provider A service provider (SP) is an organization that provides services, such as consulting, legal, real estate, communications, storage, and processing services, to other organizations. Although a service provider can be a sub-unit of the organization t ...
and a
customer In sales, commerce, and economics, a customer (sometimes known as a client, buyer, or purchaser) is the recipient of a good, service, product or an idea - obtained from a seller, vendor, or supplier via a financial transaction or exchange for ...
. Particular aspects of the service – quality, availability, responsibilities – are agreed between the service provider and the service user. The most common component of an SLA is that the services should be provided to the customer as agreed upon in the contract. As an example,
Internet service provider An Internet service provider (ISP) is an organization that provides services for accessing, using, or participating in the Internet. ISPs can be organized in various forms, such as commercial, community-owned, non-profit, or otherwise private ...
s and telcos will commonly include service level agreements within the terms of their contracts with customers to define the level(s) of service being sold in plain language terms. In this case, the SLA will typically have a technical definition of ''
mean time between failures Mean time between failures (MTBF) is the predicted elapsed time between inherent failures of a mechanical or electronic system during normal system operation. MTBF can be calculated as the arithmetic mean (average) time between failures of a system ...
'' (MTBF), ''
mean time to repair Mean time to repair (MTTR) is a basic measure of the maintainability of repairable items. It represents the average time required to repair a failed component or device. Expressed mathematically, it is the total corrective maintenance time fo ...
'' or ''
mean time to recovery Mean time to recovery (MTTR) tp://download.intel.com/design/servers/ISM/docs/317987.pdf INTEL call for Mean-Time-to-''Repair'' on page 4 left. is the average time that a device will take to recover from any failure. Examples of such devices ran ...
'' (MTTR); identifying which party is responsible for reporting faults or paying fees; responsibility for various data rates;
throughput Network throughput (or just throughput, when in context) refers to the rate of message delivery over a communication channel, such as Ethernet or packet radio, in a communication network. The data that these messages contain may be delivered ov ...
;
jitter In electronics and telecommunications, jitter is the deviation from true periodicity of a presumably periodic signal, often in relation to a reference clock signal. In clock recovery applications it is called timing jitter. Jitter is a significa ...
; or similar measurable details.


Overview

A service-level agreement is an agreement between two or more parties, where one is the customer and the others are service providers. This can be a legally binding formal or an informal "contract" (for example, internal department relationships). The agreement may involve separate organizations or different teams within one organization. Contracts between the service provider and other third parties are often (incorrectly) called SLAs – because the level of service has been set by the (principal) customer, there can be no "agreement" between third parties; these agreements are simply "contracts." Operational-level agreements or OLAs, however, may be used by internal groups to support SLAs. If some aspect of service has not been agreed upon with the customer, it is not an "SLA". SLAs commonly include many components, from a definition of services to the termination of agreement. To ensure that SLAs are consistently met, these agreements are often designed with specific lines of demarcation and the parties involved are required to meet regularly to create an open forum for communication. Rewards and penalties applying to the provider are often specified. Most SLAs also leave room for a periodic (annual) revisitation to make changes. Since the late 1980s SLAs have been used by fixed-line telecom operators. SLAs are so widely used these days that larger organizations have many different SLAs existing within the company itself. Two different units in an organization script an SLA with one unit being the customer and another being the service provider. This practice helps to maintain the same quality of service amongst different units in the organization and also across multiple locations of the organization. This internal scripting of SLA also helps to compare the quality of service between an in-house department and an external service provider. The output received by the customer as a result of the service provided is the main focus of the service level agreement. Service level agreements are also defined at different levels: * Customer-based SLA: An agreement with an individual customer group, covering all the services they use. For example, an SLA between a supplier (IT service provider) and the finance department of a large organization for the services such as finance system, payroll system, billing system, procurement/purchase system, etc. * Service-based SLA: An agreement for all customers using the services being delivered by the service provider. For example: ** A mobile service provider offers a routine service to all the customers and offers certain maintenance as a part of an offer with the universal charging. ** An email system for the entire organization. There are chances of difficulties arising in this type of SLA as level of the services being offered may vary for different customers (for example, head office staff may use high-speed LAN connections while local offices may have to use a lower speed leased line). * Multilevel SLA: The SLA is split into the different levels, each addressing different set of customers for the same services, in the same SLA. ** Corporate-level SLA: Covering all the generic
service level management The Information Technology Infrastructure Library (ITIL) is a set of detailed practices for IT activities such as IT service management (ITSM) and IT asset management (ITAM) that focus on aligning IT services with the needs of business. ITIL de ...
(often abbreviated as SLM) issues appropriate to every customer throughout the organization. These issues are likely to be less volatile and so updates (SLA reviews) are less frequently required. ** Customer-level SLA: covering all SLM issues relevant to the particular customer group, regardless of the services being used. ** Service-level SLA: covering all SLM issue relevant to the specific services, in relation to this specific customer group.


Components

A well-defined and typical SLA will contain the following components: * Type of service to be provided: It specifies the type of service and any additional details of the type of service to be provided. In the case of an IP network connectivity, the type of service will describe functions such as operation and maintenance of networking equipment, connection bandwidth to be provided, etc. * The service's desired performance level, especially its reliability and responsiveness: A reliable service will be the one that suffers minimum disruption in a specific amount of time and is available at almost all times. Service with good responsiveness will perform the desired action promptly after the customer requests it. * Monitoring process and service level reporting: This component describes how the performance levels are supervised and monitored. This process involves gathering different types of statistics, how frequently these statistics will be collected and how they will be accessed by the customers. * The steps for reporting issues with the service: This component will specify the contact details to report the problem and the order in which details about the issue have to be reported. The contract will also include a time range in which the problem will be looked into and when the issue will be resolved. * Response and issue resolution time frame: The response time frame is the period by which the service provider will start the investigation of the issue. Issue resolution time frame is the period by which the current service issue will be resolved and fixed. * Repercussions for the service provider not meeting its commitment: If the provider is not able to meet the requirements as stated in SLA then the service provider will have to face consequences. These consequences may include the customer's right to terminate the contract or ask for a refund for losses incurred by the customer due to failure of service.


Common metrics

Service-level agreements can contain numerous service-
performance metrics A performance indicator or key performance indicator (KPI) is a type of performance measurement. KPIs evaluate the success of an organization or of a particular activity (such as projects, programs, products and other initiatives) in which it en ...
with corresponding service-level objectives. A common case in IT-service management is a
call center A call centre ( Commonwealth spelling) or call center (American spelling; see spelling differences) is a managed capability that can be centralised or remote that is used for receiving or transmitting a large volume of enquiries by telephone. ...
or
service desk Information technology service management (ITSM) is the activities that are performed by an organization to design, build, deliver, operate and control information technology (IT) services offered to customers. Differing from more technology-or ...
. Metrics commonly agreed to in these cases include: * Abandonment Rate: Percentage of calls abandoned while waiting to be answered. * ASA (Average Speed to Answer): Average time (usually in seconds) it takes for a call to be answered by the service desk. * TSF (Time Service Factor): Percentage of calls answered within a definite
timeframe Time is the continued sequence of existence and events that occurs in an apparently irreversible succession from the past, through the present, into the future. It is a component quantity of various measurements used to sequence events, to ...
, e.g., 80% in 20 seconds. * FCR ( First-Call Resolution): A metric that measures a contact center's ability for its agents to resolve a customer's inquiry or problem on the first call or contact. * TAT ( Turn-Around Time): Time taken to complete a certain task. * TRT (
total resolution time A service-level agreement (SLA) is a commitment between a service provider and a customer. Particular aspects of the service – quality, availability, responsibilities – are agreed between the service provider and the service user. ...
): Total time taken to complete a certain task. * MTTR ( Mean Time To Recover): Time taken to recover after an outage of service.
Uptime Uptime is a measure of system reliability, expressed as the percentage of time a machine, typically a computer, has been working and available. Uptime is the opposite of downtime. It is often used as a measure of computer operating system reliab ...
is also a common metric, often used for data services such as
shared hosting A shared web hosting service is a web hosting service where many websites reside on one web server connected to the Internet. The overall cost of server maintenance is spread over many customers. By using shared hosting, the website will share a ...
,
virtual private server A virtual private server (VPS) is a virtual machine sold as a service by an Internet hosting service. The virtual dedicated server (VDS) also has a similar meaning. A virtual private server runs its own copy of an operating system (OS), and cus ...
s and
dedicated servers A dedicated hosting service, dedicated server, or managed hosting service is a type of Internet hosting in which the client leases an entire server not shared with anyone else. This is more flexible than shared hosting, as organizations have f ...
. Common agreements include percentage of network uptime, power uptime, number of scheduled
maintenance window In information technology and systems management, a maintenance window is a period of time designated in advance by the technical staff, during which preventive maintenance that could cause disruption of service may be performed. High availabi ...
s, etc. Many SLAs track to the
ITIL The Information Technology Infrastructure Library (ITIL) is a set of detailed practices for IT activities such as IT service management (ITSM) and IT asset management (ITAM) that focus on aligning IT services with the needs of business. ITIL de ...
specifications when applied to IT services.


Specific examples


Backbone Internet providers

It is not uncommon for an internet backbone service provider (or
network service provider Network Service Provider (NSP) is one of the roles defined in the National Information Infrastructure (NII) plan, which governed the transition of the Internet from US federal control to private-sector governance, with an accompanying shift from th ...
) to explicitly state its SLA on its website. The U.S.
Telecommunications Act of 1996 The Telecommunications Act of 1996 is a United States federal law enacted by the 104th United States Congress on January 3, 1996, and signed into law on February 8, 1996, by President Bill Clinton. It primarily amended Chapter 5 of Title 47 of ...
does not expressly mandate that companies have SLAs, but it does provide a framework for firms to do so in Sections 251 and 252. Wikisource:Telecommunications Act of 1996#SEC. 101. ESTABLISHMENT OF PART II OF TITLE II. Section 252(c)(1) for example ("Duty to Negotiate") requires Incumbent local exchange carriers (ILECs) to negotiate in good faith about matters such as resale and access to rights of way.


WSLA

A web service level agreement (WSLA) is a standard for service level agreement compliance monitoring of web services. It allows authors to specify the performance metrics associated with a web service application, desired performance targets, and actions that should be performed when performance is not met.
WSLA Language Specification, version 1.0
was published by IBM in 2001.


Cloud computing

The underlying benefit of
cloud computing Cloud computing is the on-demand availability of computer system resources, especially data storage ( cloud storage) and computing power, without direct active management by the user. Large clouds often have functions distributed over mul ...
is shared resources, which are supported by the underlying nature of a shared infrastructure environment. Thus, SLAs span across the cloud and are offered by service providers as a service-based agreements rather than a customer-based agreements. Measuring, monitoring and reporting on cloud performance is based on the end UX or their ability to consume resources. The downside of cloud computing relative to SLAs is the difficulty in determining the root cause of service interruptions due to the complex nature of the environment. As applications are moved from dedicated hardware into the
cloud In meteorology, a cloud is an aerosol consisting of a visible mass of miniature liquid droplets, frozen crystals, or other particles suspended in the atmosphere of a planetary body or similar space. Water or various other chemicals may co ...
, they need to achieve the same even more demanding levels of service than classical installations. SLAs for cloud services focus on characteristics of the data center and more recently include characteristics of the network (see
carrier cloud In cloud computing a carrier cloud is a class of cloud that integrates wide area networks (WAN) and other attributes of communications service providers’ carrier grade networks to enable the deployment of highly complex applications in the cl ...
) to support end-to-end SLAs. Any SLA management strategy considers two well-differentiated phases: negotiating the contract and monitoring its fulfillment in real-time. Thus, SLA management encompasses the SLA contract definition: the basic schema with the QoS parameters; SLA negotiation; SLA monitoring; SLA violation detection; and SLA enforcement—according to defined policies. The main point is to build a new layer upon the grid, cloud, or SOA middleware able to create a negotiation mechanism between the providers and consumers of services. An example is the EU–funded Framework 7 research project, SLA@SOI, which is researching aspects of multi-level, multi-provider SLAs within service-oriented infrastructure and cloud computing, while another EU-funded project, VISION Cloud, has provided results concerning content-oriented SLAs. FP7 IRMOS also investigated aspects of translating application-level SLA terms to resource-based attributes to bridge the gap between client-side expectations and cloud-provider resource-management mechanisms. A summary of the results of various research projects in the area of SLAs (ranging from specifications to monitoring, management and enforcement) has been provided by the European Commission.


Outsourcing

Outsourcing Outsourcing is an agreement in which one company hires another company to be responsible for a planned or existing activity which otherwise is or could be carried out internally, i.e. in-house, and sometimes involves transferring employees and ...
involves the transfer of responsibility from an organization to a supplier. This new arrangement is managed through a contract that may include one or more SLAs. The contract may involve financial penalties and the right to terminate if any of the SLA metrics are consistently missed. The setting, tracking and managing SLAs is an important part of the
outsourcing relationship management Outsourcing relationship management (ORM) is the business discipline widely adopted by companies and public institutions to manage one or more external service providers as part of an outsourcing strategy. ORM is a broadly used term that encompass ...
(ORM) discipline. Specific SLAs are typically negotiated upfront as part of the outsourcing contract and used as one of the primary tools of outsourcing governance. In software development, specific SLAs can apply to application outsourcing contracts in line with standards in software quality, as well as recommendations provided by neutral organizations like
CISQ The Consortium for IT Software Quality (CISQ) is an IT industry group comprising IT executives from the Global 2000, systems integrators, outsourced service providers, and software technology vendors committed to making improvements in the quali ...
, which has published numerous papers on the topic (such as ''Using Software Measurement in SLAs'') that are available in to the public.


See also

*
Best-effort delivery Best-effort delivery describes a network service in which the network does ''not'' provide any guarantee that data is delivered or that delivery meets any quality of service. In a best-effort network, all users obtain best-effort service. Under b ...
*
IT cost transparency IT cost transparency is a category of information technology management software and systems that enables enterprise IT organizations to model and track the total cost to deliver and maintain the IT Services they provide to the business. It is ...
*
Network monitoring Network monitoring is the use of a system that constantly monitors a computer network for slow or failing components and that notifies the network administrator (via email, SMS or other alarms) in case of outages or other trouble. Network monitori ...
* Operational-level agreement (OLA) *
Service-oriented architecture In software engineering, service-oriented architecture (SOA) is an architectural style that focuses on discrete services instead of a monolithic design. By consequence, it is also applied in the field of software design where services are provide ...
(SOA) *
Service level Service level measures the performance of a system. Certain goals are defined and the service level gives the percentage to which those goals should be achieved. Fill rate is different from service level. Examples of service level: * Percentage o ...
*
Service level objective A service-level objective (SLO) is a key element of a service-level agreement (SLA) between a service provider and a customer. SLOs are agreed upon as a means of measuring the performance of the Service Provider and are outlined as a way of avo ...


References


External links


Service Level Agreement (SLA)
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