The Role of Service Level Agreement to the World of Business

Have you heard about the term “Service Level Agreement” or SLA? Service Level Agreement is like a pre-nuptial contract between two parties, usually a service provider and the intended recipient. It is like before the formal bind will take place, the provider and the recipient has to draw the line as to the extent or the level of service that will be provided, its terms and conditions and at the same time, establish and manage the expectations of the customer. SLA is a very important document that will provide a framework of understanding between two parties that will eventually minimize conflicts in the future, identify the needs of the customers and welcome some disputes to eliminate unrealistic expectations.

Service level agreements can also take place between two service providers and this is through outsourcing. Outsourcing is very common nowadays, especially in the call center industry. Say for example internet service providers such as AOL, Comcast and Yahoo, and PC manufacturers such as Dell Computers, and Gateway will hire an outsourcer, a third party company to manage customer support to their members or subscribers. The SLA could then include the number of employees to be hired, the type of service to be rendered, either technical, billing or accounts support, the number of operating hours and specific metrics to determine the performance of the site. If in case some conditions were not met or goals were constantly missed, the first party or the service provider can terminate the contract at any given time or it may even involve financial penalties as specified in the SLA as well.