If you`re in business, you`ve likely come across some jargon that might not be familiar to the average layperson. One such term is Service Level Agreement (SLA). This is especially true if you`re in tech or any industry that provides services to clients or customers.
So, what exactly is a Service Level Agreement definition Investopedia? Simply put, it`s a contract between a service provider and a client that outlines the level of service that the provider will deliver. The SLA typically includes items such as the quality of service, response and resolution times, and any guarantees that the service provider makes to the client.
An SLA can be useful for both parties. For the service provider, it serves as a way to set expectations and ensure that they are meeting the needs of their clients. For the client, it provides a clear understanding of what they can expect from the service provider, and what will happen if those expectations are not met.
One important aspect of an SLA is the Service Level Objective (SLO). This is the measurable metric that the provider uses to determine if they are meeting the agreed-upon level of service. For example, if the SLA guarantees a response time of under an hour, the SLO might be to respond to 90% of requests within that timeframe.
It`s important to note that an SLA is not a one-size-fits-all solution. Each contract should be tailored to the specific needs of the provider and client. This includes defining the scope of the service, identifying any exclusions, and determining what will happen in the event of a breach.
So why is an SLA important? In short, it helps to ensure that both parties are on the same page. It provides a clear understanding of what is expected, and what will happen if those expectations are not met. Additionally, it can help to build trust between the service provider and the client.
In conclusion, if you`re in a business that provides services to clients or customers, it`s important to have a clear understanding of what a Service Level Agreement definition Investopedia is. By outlining the level of service that will be provided, and the expectations that both parties have, an SLA can help to ensure a successful business relationship.