What is the necessity of service level Agreement


A service level agreement is a formal agreement executed between two parties. This agreement will clarify the services which shall be provided by the service provider. SLA is mainly a contract between a service provider and other party (its customer) which describes the services and performance standards.
Service Level Agreement Components
Service Level Agreements (SLAs) will consist the following elements:
Ø  Description of the services
Ø  Reliability- Time of availing the service
Ø  Responsiveness and effectiveness of the service
Ø  Process & procedure of service
Ø  Process of monitoring the Performance
Ø  Description of Penalties in case failure to meet obligations
Ø  Circumstances under which terms of the service level agreement be waived
Service level agreement gives the clarity of expectation and provides benefits to both parties. A clause can be there regarding incentives and penalties and besides this it will also indicate the time when service provider is entitled to terminate the agreement.
Business entities usually outsource wide range of services. At the time services are outsourced, business entity enters into a Service Level Agreement (SLA) which explains the relationship among both the parties. SLA covers everything related to business relationship. SLA can be entered with the consultant or freelancers. It is very beneficial up to the services are rendered.
SLAs are periodically reviewed and updated by the Service providers which explain if there is any addition made or modification of existing services or if there is any change in regulatory environment.

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