Service Level Agreements: A Legal and Practical Guide

This pocket guide identifies some of the benefits and the pitfalls that an organisation can encounter when negotiating and drafting SLAs. It gives an overview of SLAs, highlighting typical scenarios that can arise, and provides information on typical solutions that have been adopted by other organisations.

A wide range of industry sectors will outsource service provision (for example, banking, pharmaceuticals, and insurance companies). This can happen where an organisation outsources its IT payroll needs, its helpdesk and IT maintenance requirements, its payment processing, or its whole IT function.

The key risk

The key risk for an organisation that enters into an outsourcing transaction, are that the services that it receives from the supplier will be worse than the services they were receiving before, or that the cost savings that were anticipated or promised, are not achieved.

The SLA

To try and avoid this scenario, the outsourcing contract should include a Service Level Agreement (SLA). The SLA must be drafted to govern the standard of service that you require, including the cost of those services and the consequences of not achieving pre-agreed standards.

The wider environment

While Service Level Agreements are a key method, within ITIL, for setting out how two parties have agreed that a specific service (usually, but not necessarily, IT-related) will be delivered by one to the other, and the standards or levels to which it will be delivered, the basic concept is now far more widely applied than just in ITIL® and ITSM environments.

This pocket guide provides information and guidance on SLAs to those in the wider environment, from a legal and practical view point.