The trend of outsourcing IT services has grown over the past few years. Productized services have many advantages, including scalability, external support, flexible pricing tiers, and term-based commitments. However, those advantages also bring with them a number of challenges as well.
Vendor procurement and accountability is not always straightforward. Many organizations struggle to understand the true cost and the true value of the services they pay for. This hinders their ability to ensure all Service Level Agreements (SLAs) are adequately maintained.
In this article, we’ll take a look at SLAs and provide you with a few tips for success.
What Are Service Level Agreements (SLAs)?
Service Level Agreements are explicit expectations of a vendor, defined with metrics for accountability. SLAs often include a series of discounts or penalties that can be exercised if a commitment is broken. These penalties are put in place to ensure that vendors are held financially responsible for any lapses in their service which could affect customers’ end-users and bottom line.
Components of an SLA
An SLA has two main components: Service Level Objectives (SLO) and Service Level Indicators (SLIs).
- SLOs provide your team with specific goals (e.g., 99.97% uptime) they must meet to keep an agreement in good standing.
- SLIs provide your team with real-time measurements (e.g., 99.998% uptime) related to that goal.
With both SLOs and SLIs, it’s a lot easier to fully understand, agree to, measure, and own an SLA.