The document discusses developing service level agreements (SLAs). It explains that SLAs determine maintenance requirements based on organizational policies, equipment documentation and warranties, support contracts, and internal client service levels. The document outlines components of effective SLAs like objectives, service descriptions, performance standards, compensation for missed targets, and signatories. It also distinguishes between customer, service, and multi-level SLAs, as well as operational level agreements between internal support groups.

1. Yeka Industrial College
LO2: Develop Service Level Agreements

2. 1. Develop service level agreements
 Determining your organization’s maintenance requirements
 We have so far discussed some broad areas of preventative
maintenance. From the point of view of an IT Support person, how do
you determine exactly what maintenance should be done, and how
often it should be done? What information should you refer to?
 To start with, your organisation will have specific procedures that deal
with maintenance and how it is scheduled. These procedures will be
either as a result of, or in conjunction, with the following:

3. Cont’d
 Organisational policies, for example, a particular procedure may be in place
because of your organisation’s policy on the management of risk.
 Equipment, in particular specialised equipment, is covered by warranties and
maintenance contracts. These will often involve an agreed level of support
for the equipment, also called a service level agreement (SLA).
 Both equipment and software are provided with documentation regarding their
handling and maintenance requirements.
 Support is also often provided by phone or website, and may even involve the
provision of training.
 If you work in IT Support within your own organisation, the service you provide
to your internal clients will also be governed by a service level agreement.

4. Organizational policies
 The maintenance procedures in an organisation will
be determined by a number of factors, including:
 how critical the IT components and/or software are
 cost constraints
 the risk to business continuity
 pre-existing commitments
 expectations of service by the organisation’s business
units.

5. Service level agreement
A service-level agreement (SLA) is a contract between a service provider and its customers that documents
what services the provider will furnish and defines the service standards the provider is obligated to meet.
A service level agreement refers to a formal contract that dictates a set of deliverables that the service provider
has agreed to provide to an end-user. In simpler terms, a service level agreement is a formal agreement
between a business and the end-user (employees or customers) that elaborates the services that will be
delivered, how they will be delivered, and the quality that can be expected.

6. External service level agreements
 Maintenance agreements are a way of ensuring that the business is supported to an agreed
level at a known cost.
 As a result, the business may enter into an agreement with an IT support organisation. All
critical hardware components and software should be covered by either a warranty or
maintenance agreement. There are a number of things to consider:
 1. New purchases. A warranty agreement comes automatically with the purchase of
hardware components and software. You usually have the option of extending the warranty
when you purchase the item.
 2. Extension of warranty. You can enter into a maintenance agreement when the initial
warranty expires rather than extending the warranty.
 3. Type of cover. A maintenance agreement is an agreement negotiated between the
organisation and the supplier to maintain the hardware or software. Maintenance agreements
can be on a fixed service basis, e.g. 24 hours a day, 7 days per week (24/7); 8 hours a day, 5
days a week (8/5); 12 hours a day, 5 days a week (12/5) or on a per-call basis.

7. What is a service level agreement and what is its purpose?
 The Service Level Agreement (SLA) is an agreement between a
provider and an end-user. This agreement establishes, in very
clear terms, and defines the level of service that the end-user
expects from the service provider.
 The output received by the customer as a result of the service
provided is the main focus of the service level agreement

8. How to write an SLA?
 Evaluate your current service levels. ...
 Identify your objectives. ...
 Choose a contract format. ...
 Determine the level of service. ...
 Articulate the terms of the agreement. ...
 Clarify performance expectations. ...
 Outline payment expectations. ...
 Include appendices if necessary.
 How do you make an SLA?
 Steps in Developing an SLA
 Define the service you want to outsource.
 Determine what you can measure.
 Describe your business need and metrics.
 Obtain your baselines/set service targets.
 Decide on how you will monitor and review performance.
 Determine your reporting procedures.
 Identify the project's business owner/manager.

9. The main elements of a good SLA
 Overall objectives. The SLA should set out the overall objectives for the services to be provided. ...
 Description of the Services. The SLA should include a detailed description of the services. ...
 Performance Standards. ...
 Compensation/Service Credits. ...
 Critical Failure.

10. The difference between service level agreement and key performance indicators
Service level agreement is an agreement between
you and your customer that defines how your
relationship will work in the future. But, key
performance indicators (KPIs) are the metrics
chosen to gauge how well a team performed against
agreed standards.

11. Service level agreements are also defined at different levels
 Customer-based SLA: An agreement with an individual customer group, covering all the services they use. For
example, an SLA between a supplier (IT service provider) and the finance department of a large organization for
the services such as finance system, payroll system, billing system, procurement/purchase system, etc.

12. Cont’d
 Service-based SLA: An agreement for all customers using the services being delivered by the service provider. For
example:
 A mobile service provider offers a routine service to all the customers and offers certain maintenance as a part of an
offer with the universal charging.
 An email system for the entire organization. There are chances of difficulties arising in this type of SLA as level of the
services being offered may vary for different customers. For example, head office staff may use high-
speed LAN connections while local offices may have to use a lower speed leased line.
 Multilevel SLA: The third and the last type of service level agreement is the multi-level SLA. In multi-level SLA, aspects
of SLA are defined according to the organization of the customer using some kind of inheritance with overall definitions
with relevance for all subordinate levels. This SLA focuses on the organization of the customer. All services and their
interrelationships with subordinate services are used when defining the multi-level service level agreement structure.
 The SLA is split into the different levels, each addressing different set of customers for the same services, in the same
SLA.
 Corporate-level SLA: Covering all the generic service level management (often abbreviated as SLM) issues appropriate
to every customer throughout the organization. These issues are likely to be less volatile and so updates (SLA reviews)
are less frequently required.
 Customer-level SLA: covering all SLM issues relevant to the particular customer group, regardless of the services being
used.
 Service-level SLA: covering all SLM issue relevant to the specific services, in relation to this specific customer group.

13. Components of SLA
 A well-defined and typical SLA will contain the following components:-
 Type of service to be provided: It specifies the type of service and any additional details of type of service to
be provided. In case of an IP network connectivity, type of service will describe functions such as operation and
maintenance of networking equipment, connection bandwidth to be provided, etc.
 The service's desired performance level, especially its reliability and responsiveness: A reliable service will
be the one that suffers minimum disruption in a specific amount of time and is available at almost all times. A
service with good responsiveness will perform the desired action promptly after the customer requests it.
 Monitoring process and service level reporting: This component describes how the performance levels are
supervised and monitored. This process involves gathering different type of statistics, how frequently these
statistics will be collected and how they will be accessed by the customers.
 The steps for reporting issues with the service: This component will specify the contact details to report the
problem to and the order in which details about the issue have to be reported. The contract will also include a
time range in which the problem will be looked into and when the issue will be resolved.
 Response and issue resolution time-frame: Response time-frame is the time period by which the service
provider will start the investigation of the issue. Issue resolution time-frame is the time period by which the
current service issue will be resolved and fixed.
 Repercussions for service provider not meeting its commitment: If the provider is not able to meet the
requirements as stated in SLA then service provider will have to face consequences. These consequences may
include customer's right to terminate the contract or ask for a refund for losses incurred by the customer due to
failure of service.

14. Common metrics of SLA
 Service-level agreements can contain numerous service-performance metrics with
corresponding service-level objectives. A common case in IT-service management is a call
center or service desk. Metrics commonly agreed to in these cases include:
 Abandonment Rate: Percentage of calls abandoned while waiting to be answered.
 ASA (Average Speed to Answer): Average time (usually in seconds) it takes for a call to be answered by
the service desk.
 TSF (Time Service Factor): Percentage of calls answered within a definite timeframe, e.g., 80% in
20 seconds.
 FCR (First-Call Resolution): A metric that measures a contact center's ability for its agents to resolve
a customer's inquiry or problem on the first call or contact.
 TAT (Turn-Around Time): Time taken to complete a certain task.
 TRT (total resolution time): Total time taken to complete a certain task.
 MTTR (mean Time to recover): Time taken to recover after an outage of service.
 Uptime is also a common metric, often used for data services such as shared hosting, virtual private
servers and dedicated servers. Common agreements include percentage of network uptime, power
uptime, number of scheduled maintenance windows, etc.

15. Cont’d

16. What is Service Level Management (SLM)?
 Service Level Management (SLM) is the practice of managing service level agreements by defining,
documenting, evaluating, and assessing the level of services being offered. With good SLM practices,
an organization can:
 Meet and exceed customer expectations
 Define basic criteria for gauging the status of offered services
 Determine practical conditions that it can handle
 Adhere to the terms and conditions agreed upon with customers.
 Prevent future disagreements and conflicts.

17. Why Service-Level Agreements Are Important?
 A service-level agreement is important because it:
 Protects both parties: The SLA sets standards for the service, ensuring both the
service provider and end user are on the same page with expectations. By creating
clear, measurable guidelines, the end user knows exactly what to expect and what
the responsibilities are for everyone involved.
 Provides recourse for unmet expectations: The SLA provides specific consequences
for what will happen if a service provider fails to meet its obligations to the end
user. Without the SLA, it's unclear what will happen if one or both parties fail to
meet expectations. With a service-level agreement in place, there is transparency
about what the targets are for each of the service levels and what will happen if
they're unmet.
 Gives peace of mind: The SLA gives the end user peace of mind knowing they can
hold their service provider accountable for the service they committed to at the
time of the agreement.

18. Service-Level Agreement Templates
 Here are some service-level agreement templates that you can use to define the service you will
offer end users:
 Small business service-level agreement
 Business analysis service-level agreement
 Business cloud service-level agreement
 HR business service-level agreement

19. Service Level Agreement
 Service Provider: IT solution plc.
 Customer: XY Company
 Objective of the Service: Maintenance service
 XY Company asked for Maintenance service from our plc. Through its application on
 Responsibilities
 Service provider’s responsibilities:
 Provide maintenance service based on the requirements
 Complete the work on time
 Provide technical support & t training
 Customer responsibilities:
 Submit clear request to service provider
 Agree on financial requirements
 Check the functionality of maintained equipment’s
 Service Measurement: Functionality of maintained equipment’s will be measured on the level of meeting the requirements requested.
 Modification and review of the agreement:
 This agreement is valid until
 This agreement can erase if the customer and service provider both want to cancel it.
 Signature of service provider Signature of Customer
 Date Date

20. Operational-level agreements
 Operational level agreement: - defines the interdependent relationships in support
of a service level agreement. The agreement describes the responsibilities of each
internal support group toward other support groups, including the process and
timeframe for delivery of their services.
 What is the purpose of an operational level agreement?
 Operational level agreements are legal documents that outline how information
technology (IT) companies and service provider plan to provide a service and track
performance indicators to an internal customer. An OLA aims to define the scope
and depth of responsibilities and duties by company departments.
 What is an operational level agreement vs. service level agreement?
 The service level agreement is an agreement between an IT service provider and
customer. But, operational level agreement is an agreement between an IT service
provider and another part of the same organization, governing the delivery of an
infrastructure service.

21. What is the difference between SLA, OLA and UC?
 OLA is an agreement between an internal service provider and an internal customer. It define the
rage(distribution) and quality of the covered services.
 Service level agreement is an agreement between an IT service provider and customer.
 Underpinning contract (UC) is a contract between an external provider and an internal end customer.
It is a contract between the IT organization and suppliers.

22. The difference between SLA and Contract
 Contract is defined as an agreement between two or more parties, especially one that
is written and enforceable by law. This legal document outlining the service provided,
duration, cost, resources, approach, assumptions etc. contract can just refer to the
agreed SLA. It might then last for 2 years.
 But, Service Level Agreement focus only on the performance measuring and service
quality agreed to by both parties, and may be used as a measurement tool as part of
contract. The service levels themselves may be established based on various factors,
example:- a service provider may provide on-line credit checks to its customers. A
service level in the contract may state the on-line service must be operational 99% of
any given month, or it must provide the requested information with 3 hours after a
request etc. The relational for having separate SLA document is that you can revise
the SLA without having to revise contract. The SLA may be reviewed quarterly,
because to reduces the administrative burden of reviewing the contract too frequently.

23. Web service level agreement
 A web service level agreement (WSLA) is a standard for service level agreement
compliance monitoring of web services. It allows authors to specify the performance
metrics associated with a web service application, desired performance targets, and
actions that should be performed.
 What is disaster recovery?
 Disaster recovery (DR) is an organizations ability to respond and recover from an
event that negatively affects business operations. The goal of DR methods is to
enable the organizations to regain use of critical systems and IT infrastructure as
soon as possible after a disaster occurs. The scope of DR describes procedures to
recover all critical services following a major disaster that inhibits to continue
providing services.
 IT disaster recovery
 Purpose
 Scope
 Assumption

24. Fixed service versus per-call cover
 The benefit of the fixed service type of maintenance
agreement is that you receive a dedicated and, typically,
faster response. Depending on the terms of the agreement,
your maintenance costs are also likely to be covered.
 A per-call basis means you receive maintenance services from
the supplier as required. The problem with this type of
agreement is that you have to wait until a technician is
available and you are charged for labour and parts. A benefit is
this cost can often be less expensive than a maintenance
contract.

25. Software warranties and maintenance agreements
 Software should also be covered by a warranty or maintenance
agreement. Software warranty only lasts for a short period of
time, so a maintenance agreement for critical software should
be in place. If customised software has been developed in-
house, a maintenance agreement will not be necessary
because it will be maintained internally.
 A software maintenance agreement may include, for example,
a free or discounted upgrade of packaged software.

26. Equipment documentation
 Each item of IT equipment should be accompanied by documentation.
This may be provided in hard copy, as a manual, on CD, or on a support
website. If original documentation provided as hard copy is missing, it
can usually also be downloaded from the manufacturer’s website. IT
Support staff need to be able to read and interpret all such technical
documentation.
 Documentation for a system should outline the manufacturer’s
recommended maintenance procedures for the unit. The procedures
should state:
 how often maintenance procedures should be done
 any equipment/material/consumables that are required
 the actual steps to complete the maintenance task, including all
relevant safety precautions for the task.

27. Cont’d
 The system’s documentation should also identify any components of a
system that should not have any preventative maintenance applied to it
for safety reasons. Generally speaking, hardware manufacturers will
include instructions for:
 cleaning
 care
 consumables — handling, installing and disposing
 making adjustments
 Troubleshooting.
 Apart from documentation, the supplier’s website will supply software
patches and driver updates as they become available.