Service-Level Agreement Explainer
A service-level agreement, or SLA, defines measurable commitments between a service provider and customer. It usually sits within or alongside a contract and states what service is covered, how performance is measured, who reports it, and what happens when targets are missed.
Measures may include availability, response time, resolution time, throughput, accuracy, delivery, or recovery. Definitions matter: the measurement window, time zone, severity level, start and stop events, maintenance exclusions, dependencies, and data source can materially change the result.
Targets should reflect business impact and the cost of higher performance. Service credits can provide a remedy but rarely compensate for a severe outage. Escalation, incident communication, root-cause review, continuity, and termination rights may matter more than the credit formula.
An SLA is not a guarantee that failure will never occur. Poorly chosen metrics can meet the contract while users remain dissatisfied. Review trends, customer outcomes, recurring exclusions, and capacity changes, and revise commitments through controlled governance rather than informal assumptions.
Specify scope, formula, clock, data source, exclusions, and reporting frequency.
A target without a definition cannot be governed consistently.
Higher availability or faster recovery usually costs more.
Set tiers that reflect real business consequences.
Escalation, communication, cause analysis, continuity, and exit are essential.
A small credit does not restore a critical lost service.
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