In a service level agreement (SLA), a supplier agrees to achieve defined levels of performance and a customer obtains rights and remedies if the supplier fails to achieve those levels of performance. Whether the SLA is a stand-alone document or a part of a larger outsourcing agreement, it can be an effective tool for aligning the incentives of an outsourcing supplier with the objectives of an outsourcing customer.
The first and most important step in developing an effective SLA is to ask the right questions. This article will give you those questions and some background on how to choose the right answers. The questions are as follows:
1. Which service levels will you measure?
Service levels are defined ways of measuring a supplier’s performance. A service level generally is a measure of the quality, speed, availability, capacity, reliability, user-friendliness, timeliness, conformity, efficiency or effectiveness of services. For example, an availability service level for a
