Creating Effective IT Service Level Agreements

A Service Level Agreement (SLA) is a legal agreement or informal contract negotiated between a customer and the service provider. It is used to mainly document a common understanding about services provided, priorities established, responsibilities assigned, guarantees and warranties.

Each area of service provided has the scope and corresponding level of service defined. It is mainly about how the service that is provided to the customer is delivered. It helps to bring accountability in the relationships between vendor and client.


SLA needs to set expectations for the corresponding parties and validate parameters to measure the project’s success. To do so, relevant performance metrics and service level objectives are used. The SLA is critical to balance the business objectives against impact of risks and ensure continuity. An effective SLA should also reveal goals for higher performance and productivity. It should target at surpassing service levels by identifying the gaps that hinder achievements.


Before determination of quantities to be measured, the customer’s goals have to be well understood. It is then easier to recognize the factors or metrics that are appropriate to be measured regarding performance, financial aspects or strategy. By drawing upon past projects experience, a better insight is gained regarding the relevant metrics to be tracked along with the tools Some of the metrics used in IT Service management are TSF (Time Service Factor), FCR (First Call Resolution), TAT (Turn around Time) etc.


The IT staff needs to conduct assessment in certain areas before collecting baseline performance metrics. They need to collect information regarding the involved applications, analyze data, identify the impending issues, furnish a baseline report on the findings and start building SLA’s. Key tenets of SLA’s comprise of visibly defined Internal and external communication routes, Issue resolution and Escalation procedures, Change management processes and Quality assurance.


SLA’s should be preferably structured to evolve with customer needs. The dynamic nature of business and the application should be given due consideration. To avoid perception problems both parties must agree on the specifications, granularity of measurements and the tools used to measure.


Once the SLA has received approval from the legal, finance and delivery teams the format, configuration and regularity of reporting is decided. To make it an ongoing process tools and methods to automate data capture may be used. This not only saves time but reduces error and conflict.


SLA’s require constant attention and updates as service level requirements may change and response times and system availability need to measure up with expectation of business users. To successfully address these challenges, leverage should be given on clearly defining the responsibilities on the client and delivery team, naming the participants at management and executive level, defining and measuring commitments, defining suitable escalation procedures, defining regular and scheduled communication and program management features.


To determine exact staffing levels for the next quarter and to review the current status, monthly or quarterly review status meetings must be scheduled between client and service provider.

Throughout , the service provider needs to execute the work priorities in the order set by the client, identify opportunities to perk up client’s business , collect and report the service level metrics, set additional productivity and quality goals and prepare and circulate the report of the completed and planned activities to the business and user groups.

| An Insight into Scope Statement in Project Management | Creating Effective IT Service Level Agreements | Disaster Recovery Planning – General Concepts | Introduction to Agile Project Management | Overview on the Six Sigma Practices | The Project Office as an Aide to Project Management | Trends and Thoughts on Project Portfolio Management |


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