Service Levels Agreements (SLAs) are precisely what their name implies: they are agreements for a service to be provided to agreed levels.

Usually, the SLAs are separate documents from the main contract. There are some good reasons for this.

SLAs are, of course, appropriate to the provision of services. It is likely, therefore, that the main contract will be concerned with the provision of services, and that it will be intended to be effective for at least the medium term. This means that the main contract will be for between three and seven years. There is hardly likely to be an effective pay-back to the customer and the provider in under three years, and there is likely to be a desire, at least by the customer, to review the market for services within a five to seven year horizon. The main contract can therefore be viewed as having a "strategic intent": it will provide the strategic direction for the services.

The SLAs, on the other hand, are more representative of a tactical view of the services. While the main contract is expected to remain in place for three to seven years, the SLAs will be subject to change during that time. Some SLAs are expected to operate for a single year: they may then be renewed. Other SLAs may be changed or rescinded because of changes to this customer's business or the environment in which it operates. The service provider will enter into these SLAs knowing that its customer operates in an opportunistic fashion.

Opportunism is increasing a major driver in many business, and the contractual structure between the customer and its service providers needs to reflect the ongoing security of the strategically-based main contract with the flexibility of the tactically-based SLAs.

Service Level Agreements can be justified on their name.

Service

A "service" is involved. This is important: we are discussing a "service" rather a "task". As a result, we expect "service provision" rather than "task completion". In general, it can be said that "service provision" achieves an outcome while "task completion" delivers an output, or product.

It is easy to overlook the terms used. By looking at them carefully, we can identify that the service is provided to the customer; tasks would be completed for the customer. This implies that much more control rests with the service provider than the customer during the provision of a service; a contractor, completing tasks for the customer, would be more under the control of the customer during the completion of those tasks.

Again, with service provision, the outcome is achieved on behalf of the customer; with tasks completion, the outputs are delivered to the customer. This implies that the outcome of a service remains the responsibility of the service provider, while the output of a task becomes the responsibility of the customer.

This may be viewed as a discussion of semantics, but it is important to a full understanding of the exact relationship involved in a service level agreement.

In addition, there is an implication that "service provision" is ongoing, while "task completion" implies either a single occurrence of the task or repetitive iterations of the task. This is also important to understanding the relationship between a service provider and its customer.

Level

The service is provided to a "level".

There are important issues here also, that are implied by the language used.

When a contractor completes a task, there are expectations by the customer that the output from that task will meet certain minimum standards and that it will be fit for the purpose for which it is intended. In practice, these expectations may be implied.

With an office cleaning contract, there may be an expectation that desks will be free of dust. If the occupant of the office has left stacks of papers on their desk, then the cleaner will not usually be expected to dust the desk. However, over time, the cleaner is likely to look for opportunities to dust whatever areas of the desk are accessible.

With service level agreements, the levels of the service to be provided are explicitly stated and the service provider is expected to meet those specified service levels.

In the case of office cleaning, the introduction of a service level for dusting might require the cleaners to complete a non-compliance form when they were unable to dust a desk because of the state it was left in by its occupant. It is easy to take these issues to ridiculous levels.

Agreement

The service provider provides services to specified levels under an agreement.

The use of the word "agreement" is significant. It implies that the provider and the customer have agreed on the services and the service levels, rather than that they have reached the consensus often implied by the word "contract".

There is an understanding, in the word "agreement", that they are bound to the relationship because they wish to be, and a suggestion that this relationship is to their mutual benefit.