Service level agreement

Definition

A key element of an outsourcing agreement, a Service Level Agreement (SLA) defines what is being undertaken and the required levels of performance. As well as a clear description of the services, the SLA will state what metrics will be tracked and how often in order to measure and report on performance levels.

For this reason the SLA will also outline the steps to be taken if services being delivered slip below the agreed levels and ultimately gives the client the right to terminate the outsourcing agreement if, even following remedial steps, the SLA cannot be met.