What is a Service Level Agreement in IT Support?

A service-level agreement (SLA) is a must when dealing with an information technology service provider. But what does that mean? And why is it important?

Below, you’ll find all the information you need on service-level agreements.

Service-level Agreement Definition

Canadian businesses and government have spent an estimated $15 billion on technology outsourcing in 2021. But working with service providers can be a challenge for new business owners or managers with little outsourcing experience. There’s a lot to consider, from pricing to reporting. And everyone has to understand exactly what’s expected.


This is where a service-level agreement comes in. It’s a contract between you, the customer, and your chosen service provider. This document carries detailed information on the solutions the provider will deliver and the standards they’re required to meet. A standard SLA ensures both parties know the terms of the relationship.

What Does a Service-level Agreement Cover?

Agreements typically include:

General Information

The document will cover key details, such as:

  • The date on which the provider will start to deliver services
  • The names of all involved parties
  • A basic overview of the services

This section will be brief but informative.


Service Description

Your SLA should carry in-depth descriptions of all services the provider is due to deliver. This may include per-incident technical support, data backup, or any other type of information technology solution. The SLA should specify operating hours, the nature of support available, and turnaround times where applicable. It’s important to describe in what form the services will be delivered (e.g. online only or in-person).

Security Measures

Cybersecurity is critical. Trustworthy providers will understand this and implement strict security measures to protect your data at all times. An SLA will define all security steps involved.

Compensation for Service Failure

The SLA should define potential compensation available if a provider is unable to provide the services described in the SLA or cannot fulfil their promise to you in another way.

Reporting Processes

Service-level agreements will include information on the reporting process. You should understand how the provider will provide performance data, what metrics will be used, and more.

Terms of Access for Support

A service provider may be required to access your systems or your website at times. If necessary, an SLA will define your responsibilities to offer the required access.

Grounds for End of Agreement

Either you or the provider may have reason to terminate the agreement. Your SLA should stipulate the amount of notice required on both sides (e.g. one month, three months) and the duration of the agreement.


What Different Types of SLA are Available?

Businesses use three types of service-level agreements:

  • Customer
  • Internal
  • Multilevel

Each type has a distinct purpose:

Customer SLA

This agreement applies to a provider and external customers. It addresses the exact nature of the relationship, from the services provided to the rules of termination.

Internal SLA

Internal agreements apply to businesses and internal customers, such as a specific website or department (such as accounting, technical support). This type of SLA would be different from customer agreements provided to clients.

Multilevel SLA

A multilevel agreement covers different services delivered to customers. For example, this type of SLA might describe the range of subscription plans available for an online service. A customer’s plan would determine the level of service they expect, and the provider’s responsibilities.

Does Your Business Need a Service-level Agreement?

Yes. An SLA is a core component of an IT service provider’s contract. It confirms each of the services you’re hiring said provider to supply, in detail, in a reader-friendly document.

You need a service-level agreement in case of any disputes between your business and the provider. It proves that both the customer and the provider entered into the contract with full awareness of what was expected. It protects your business and the service provider equally.

Why Do SLAs Include an Indemnification Clause?

An indemnification clause is an essential addition: this defines how your service provider will indemnify (i.e. compensate) you if they violate the terms of the agreement in any way.

This clause provides you with peace of mind that you’ll receive the promised payment if a provider’s actions meet the criteria stated in the agreement. If you incur litigation expenses due to the provider’s actions, the provider would be required to indemnify you.

What are the Top Service-level Agreement Metrics?

An agreement will incorporate specific metrics used to measure the provider’s performance. Establishing those metrics can be one of the more difficult parts of coming to an agreement. They must be fair to both parties: as the customer, you should have realistic expectations for what the provider can and cannot achieve.

It’s also crucial to choose metrics for which measurable data can be gathered, ideally through automated processes (to minimize the amount of manual input required). Data should be simple to examine and base conclusions on. Here are a few common metrics that may feature in a service-level agreement:

  • Uptime rates: This refers to the length of time services are available — downtime can be inconvenient and disruptive.
  • Response times: Used to measure how long it takes a service provider to get back to you in the event of a support request or other issue.
  • Error/failure rates: It’s important to track the number of times that a service provider makes a mistake or fails to deliver the services promised.
  • Resolution times: This metric measures the length of time taken to resolve issues after you report them to the provider.

The metrics involved will differ depending on the services provided.

Choosing a Service Provider You Can Trust

A comprehensive service-level agreement offers reassurance when you start working with a new provider, but it’s critical to choose a trustworthy company to minimize the risk of poor service.

At GenX, we offer a range of expert IT services with tailored packages to suit diverse business needs. To find out how we can help you streamline your operations, contact our specialist team today!

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