What is a Service Level Agreement and the Types of SLA (2024)

What is Service Level Management (SLM)?

Service Level Management, or SLM, is defined as being “responsible for ensuring that all its service management processes, operational level agreements, and underpinning contracts, are appropriate for the agreed-upon service level targets. SLM monitors and reports on service levels, and holds regular customer reviews.”

In other words, the key criteria for any information to be contained within a Service Level Agreement (SLA) are that it must be measurable, with all language used is clear and concise in order to aid understanding.

Understanding SLM is one of the steps in getting an ITIL® certification. The IT Infrastructure Library (ITIL) certification is a globally recognized IT service management certification, distributed by Axelos. There have been several versions of ITIL, with the latest one being ITIL 4 2018. The ITIL Certification courseis an entry-level qualification in the field of IT service management, granting Foundation certification to those who complete the studies.

How Do You Design SLA Structures?

There are several ways in Service Level Management in which you can structure your SLAs. To do that, here are a few important factors to consider:

• Will the SLA structure allows flexibility in the levels of service to be delivered for various customers?
• Will the SLA structure require much duplication of effort?
• Who are the stakeholders who will sign the SLAs?

ITIL focuses on three types of options for structuring SLA: Service-based, Customer-based, and Multi-level or Hierarchical SLAs. Many different factors will need to be considered when deciding which SLA structure is most appropriate for an organization to use.

What Are The 3 Types of SLA?

1. Corporate Level

All of the general issues relevant to the organization are covered, and they are the same throughout the entire organization. For example, with security SLA at the organization level, every employee needs to create passwords of 8 characters and must change them every thirty days—or every employee needs to have an access card with an imprinted photograph.

2. Customer Level

Those issues specific to a customer can be dealt with. Security requirements of one or more departments within the organization are higher. For example, the financial department needs more top security measures by virtue of its crucial role and handling of financial resources.

3. Service Level

All issues relevant to a specific service (in relation to the customer) can be covered. Applies to all customers that contract the same service — for example, contracting IT support services for everyone who uses a particular IP telephony provider.

Using a multi-level structure for a large organization reduces the duplication of effort while still providing customization for customers and services. Therefore, corporate-level SLAs apply to everybody and every department in that organization; customer level SLAs apply to the department, and so on.

SLA Example

Let’s use another example. Say we are a beverages provider, with tea, coffee, and juices in our service portfolio. If customer A wants the tea to be provided every morning and evening, coffee before and after lunch, and juices during lunch hours, that’s the customer-specific SLA we have signed with that particular customer, and that’s how we price the offering.

On the other hand, if we also have a stand where we offer juices throughout the day but at fixed prices and where customers B and C can source their needs, this is a service-based SLA.

So what does an SLA document typically consist of? Aspects of the service, including responsibilities, quality, and availability, are agreed on between the service provider and service user. Therefore, you should make sure that you can deliver the promised product at the promised time.

An SLA document typically consists of:

• An introduction to the SLA, what does this agreement propose
• A Service description, what service this SLA supports, and details of the service
• Mutual responsibilities, who’s responsible for what part of the service
• Scope of SLA
• Applicable service hours, from what time till what time is the service available according to the agreement
• Service availability, how much is the service available during the service window and outside of the service window
• Reliability
• Customer support arrangements
• Contact points and escalation; a communication matrix
• Service performance
• Security
• Costs and charging method used

Conclusion

Understanding Service Level Management and Service Level Agreement structure give you an edge when helping your organization deliver on their promises. Gaining the ability to create and manage service solutions ensures that your organization and its customers will be able to communicate more clearly to fulfill mutual needs.

Getting ITIL certified can help boost your career in IT. Ensure you are in top shape for the ITIL 4 certification exam with Simplilearn’s ITIL 4 Foundation Certification Training course. Simplilearn also offers a variety of other ITIL training courses, including ITIL Expert programs.