Since it has become widely accepted that the provision of service and receipt should be governed by a contract, service level agreement or SLA has been a part of any business ventures or projects nowadays. In its most basic form, SLA is like a commitment in meeting specific goals.

SLAs can either be “service based” or “customer based”. Service based means that it covers all customers of a service such as email, web hosting, and coursewares among others.  Say for example Company A decided to sign up with Company B, a well known web hosting service provider. Company A came up with a service level agreement to entail Company B’s commitment to make sure that Company A’s web site should work as designed and must be available at all times to its target audience. However, there are cases wherein web hosting services experience down times and Company B is required to offer a refund based on the number of hours that Company A’s web site is unavailable.

Customer-based SLAs cover only a particular unit or department. An example would be Company C hired Company D to provide technical help desk services to its clients. An SLA was then written to include the number of hours that the help desk should be made available. If all calls were answered within the day, Company C can then issue a bonus (in cash or in kind) to Company D’s employees so as to compensate the level of performance that they have demonstrated, which may also be a part of the SLA.

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